THE Philippines’s budget deficit last year fell by 3.35 percent to P1.614 trillion from P1.67 trillion as total revenues of the national government outpaced its expenditures, the Bureau of the Treasury (BTr) said.
With the decline, the national government’s budget deficit last year narrowed to 7.3 percent of the country’s GDP from 8.6 percent in 2021, according to the Treasury.
Furthermore, the full-year budget deficit also fell within the national government’s target of P1.7 trillion ceiling.
“The fiscal outturn was driven by revenue growth of 17.97 percent outpacing the 10.35-percent expansion in government spending,” the Treasury said in a statement on Wednesday.
Given last year’s performance, Finance Secretary Benjamin E. Diokno on Wednesday said the national government is “on track” with its medium term fiscal framework target to slash the budget deficit to 3 percent of GDP by 2028.
The national government collected P3.5 trillion of total revenues last year, nearly 18 percent higher than the P3 trillion it earned in 2021, based on Treasury data.
Treasury data showed that the national government surpassed its programmed revenue collection for 2022 which was pegged at P3.3 trillion.
“Ninety-one percent [91 percent] or P3.2 trillion of the total was derived from tax revenues, exceeding the target by 2.57 percent and growing by 17.41 percent [year-on-year],” the Treasury said.
“Non-tax collections comprised the balance of 9 percent while also registering a 23.74 percent [year-on-year] growth and surpassing the 2022 program by almost 98 percent or P160.7 billion,” the Treasury added.
The Treasury said the national government’s revenue effort, which measures total collections against the country’s GDP, improved to 16.1 percent from 15.489 percent in 2021 and surpassed the 15.17 percent program for 2022.
The Treasury added that the national government’s tax efforts surpassed both 2021 performance and 2022 target as it reached 14.62 percent of GDP. In 2021 the national government’s tax effort was at 14.13 percent while it programmed a 14.42 percent tax effort target for last year.
Collections by the Bureau of Internal Revenues in 2022 rose by 12.39 percent year-on-year to P2.335 trillion but failed to meet the P2.4 trillion target set by the national government of the bureau last year.
MEANWHILE, tax revenues attributed to the Customs Bureau rose 34 percent on an annual basis to P862.4 billion from P643.6 billion, according to the Treasury.
“BOC’s robust revenue performance was supported by efforts to ensure the recovery of deficient duties and taxes, improve tax compliance, tariffs on rice imports, and public auctions of overstaying cargo,” it said.
The Treasury said the income it collected and generated hit P154.8 billion last year, 23.48 percent higher than its 2021 revenue performance of P125.3 billion. The Treasury also exceeded its P63.4-billion full-year income target for 2022.
“BTr’s robust collection was largely driven by higher remittances of dividends on shares of stocks, income from Bond Sinking Fund investments, and interest on national government deposits,” it said.
Meanwhile, the national government’s total expenditures last year expanded to P5.159 trillion, P484 billion higher than the P4.675 trillion recorded in 2021 because of larger national tax allotment shares of local government units in line with the implementation of the Mandanas ruling.
The Treasury also cited higher capital expenditures from the road and transport infrastructure program, defense modernization projects, personal services expenses due to third tranche of Salary Standardization, release of other personnel benefits and interest payments as factors to the higher disbursements by the national government last year.
“Compared to the program, the full-year actual disbursements outperformed the P5.0-trillion target for 2022 by 4.14 percent, largely attributed to the faster execution of capital outlay projects amid the lowest Covid-19 alert level classification for most parts of the country; implementation of targeted subsidy programs to mitigate the impact of higher food and fuel prices; and payment of compensation and other benefits for Covid-19 healthcare workers in health facilities,” the Treasury said.
The Treasury said the bulk or about 90 percent of the total national government disbursements last year went to primary expenditures (net of interest payments) amounting to P4.7 trillion while interest payments amounted to P502.9 billion.