PHL records P66.8-billion budget surplus in April

The Philippine government recorded a P66.8 billion budget surplus in April 2023, far higher compared to the previous year’s surplus of P4.9 billion for the same month as the acceleration in revenue collection outstripped the growth of government expenditures.

The cumulative deficit, on the other hand, decreased by 34.57% to P204.1 billion which was P107.8 billion less than the budget gap incurred during the same 4-month period last year.

Revenue Performance

Actual government revenue collections in April stood at P440.7 billion, growing by 26.66% or P92.7 billion on a year-over-year (YoY) basis.

Similarly, the resulting year-to-date (YTD) revenue for the Jan-Apr period improved to P1.3 trillion, posting YoY growth of 11.22% or P127.1 billion.

Taxes amounting to P1.1 trillion made up 89.18% of total collections, whereas non-tax sources contributed 10.82% or P136.3 billion. YTD tax and non-tax revenues both posted YoY increases of 11.78% and 6.86%, respectively.

The Bureau of Internal Revenue’s (BIR) April collection significantly improved to P336.0 billion¹, 40.24% (P96.4 billion) higher relative to the level posted in the same month a year ago.

Growth for the period was attributed to the implementation of Revenue Memorandum Circular No. 5-2023 in line with Section 37 of the TRAIN Law, which requires the filing of Quarterly VAT Returns within twenty-five days following the close of each taxable quarter wherein the transaction was recorded.

BIR total collections as of end-April amounting to P841.2 billion likewise outperformed the previous year’s outturn for the equivalent period by 13.31% or P98.8 billion.

Collections from the Bureau of Customs (BOC) registered modest growth of 2.87%, increasing by P1.9 billion in April 2023 to P67.6 billion from P65.7 billion in the previous year. BOC’s YTD collection reached P281.4 billion, 10.68% or P27.2 billion better YoY.

Bureau of the Treasury (BTr) income eased to P18.3 billion in April, 28.89% or P7.4 billion lower than the 2022 comparable level.

The downturn for the month was mainly attributed to the base effect of early remittances of dividends from GOCCs last year². As of end-April, total BTr revenue amounted to P57.3 billion, also down by 23.03% (P17.1 billion) owing to the same reason.

Non-tax collections from offices (including privatization proceeds and fees and charges) were recorded at P18.8 billion, indicating a 24.16% or P3.7 billion increase from the same period a year ago.

The positive outturn for the month led to a higher cumulative collection of P79.0 billion, surpassing the level recorded for the first four months of 2022 by 48.76% (P25.9 billion).

Expenditures

National Government (NG) disbursements for April grew by 9.00% to P373.9 billion from P343.0 billion last year owing mainly to the subsidy release to PhilHealth, larger capital expenditures of the Department of Public Works and Highways (DPWH) and Department of Transportation (DOTr), as well as higher interest payments for the month.

The spending growth was tempered by the decline in transfers to Local Government Units due to lower National Tax Allotment shares. Total expenditures for the 4-month period reached P1.5 trillion, inching up by 1.33% or P19.2 billion on a YTD basis.

Primary expenditures (net of interest payments) for April accounted for 87.63% or P327.6 billion of total expenditures, up by 7.18% (P21.9 billion) YoY. Cumulative primary expenditures of P1.3 trillion from January to April reflected a slight growth of 1.40% or P17.7 billion compared to last year.

April Interest payments (IP) reached P46.3 billion, increasing by 23.99% or P9.0 billion YoY. Meanwhile, total IP as of end-April was recorded at P188.2 billion, up by just 0.86% (P1.6 billion) over last year.

IP in proportion to revenues settled at 14.95% for the Jan-Apr period, down from 16.48% in 2022. Similarly, IP relative to expenditures slightly decreased to 12.86% from last year’s 12.92%.

Primary Surplus/ (Deficit)

Netting out interest payments from expenditures, the primary surplus for April was P113.1 billion, much higher compared to the P42.2 billion posted a year ago.

Meanwhile, the overall primary balance for the first four months remained at a deficit of P15.9 billion, albeit declining by 87.34% (P109.4 billion) YoY. 

Fiscal Indicators

The Q1 deficit was registered at 4.84% of GDP, decreasing from 6.43% for the equivalent period last year. Revenue and tax effort for the 3-month period slowed to 14.62% and 12.85% compared to 15.92% and 14.16% in 2022, respectively, due to the timing of VAT remittances in line with the TRAIN Law. Meanwhile, expenditures were at 19.45% of GDP, also lower than the 22.35% a year ago.

¹ Net of P254.0 million tax refund; BIR April gross collection is P336.3 billion when tax refund is considered. 2 Most of the dividend collections were received in April 2022, but expected remittance this year is in May.