PH gov’t posts 13% rise in revenues in ‘17

The Duterte administration registered an 11 percent improvement on expenditures in 2017 but budget deficit fell 1 percent on account of the 13 percent year-on-year rise in revenues.

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MANILA – The Duterte administration registered an 11 percent improvement on expenditures in 2017 but budget deficit fell 1 percent on account of the 13 percent year-on-year rise in revenues.

The government registered a PHP350.6 billion budget gap in 2017, down 1 percent compared to year-ago’s PHP353.4 billion and a 27 percent drop compared to the PHP482.1 billion ceiling for the year.

The deficit accounts for 2.2 percent of gross domestic product (GDP), within the 3 percent target set by economic managers.

Data released by the Bureau of the Treasury (BTr) Tuesday showed that government expenditures last year amounted to PHP2.823 trillion, higher than the PHP2.549 trillion a year ago but lower than the PHP2.909 trillion programmed for the year.

In a statement, BTr attributed the below-target expenditures to lower interest payments (IP), which totaled last year to PHP310.5 billion, 7 percent down from the programmed PHP334.9 billion.

Year-on-year, however, IP rose by 2 percent from year-ago’s PHP304.5 billion and BTr traced this to payments of interest for the Retail Treasury Bonds (RTBs) that the government issued in Sept. 2016 and April 2017 and impact of foreign exchange movements.

BTr said IP accounted for 11 percent of total government expenditures in 2017, down from the 11.9 percent share in the previous year “signifying improving fiscal space for productive government spending.”

It said the 12.6 percent decline of IP on the total expenditures compared to the 13.9 percent a year ago is “indicative of improved capacity by the National Government to service its debt.”

Total revenues last year reached PHP2.473 trillion, 13 percent up from year-ago’s PHP2.195 trillion and exceeded by 2 percent the programmed PHP2.426 trillion collections for the year.

Of the total, the Bureau of Internal Revenue (BIR) contributed PHP1.772 trillion, 13 percent higher than its PHP1.567 trillion collections in 2016 but missed by 1 percent its PHP1.782 trillion goal for the year.

The Bureau of Customs (BOC) posted 16 percent year-on-year collection performance after its revenues reached PHP458.2 billion in 2017 against year-ago’s PHP396.4 billion.

Compared to its PHP459.6 billion collection goal for the year, BOC posted an almost flat rate.

In terms of non-tax revenues, BTr contributedPHP99.9 billion, down 2 percent than its PHP101.7 billion collections in 2017 but is 71 percent higher than its PHP58.6 billion goal for the year.

The Other Offices shared in PHP122.5 billion, 8 percent higher than its PHP113.8 billion collection in 2016 and 11 percent up than its PHP109.9 billion 2017 target.

Department of Budget and Management Secretary Benjamin Diokno highlighted the good turn-out of interest payments turnout in 2017.

“The decline in the interest payment should be good. Partly we assumed that interest rates will go up but it did not so that’s good. Lower-than-expected interest payment, that is a positive,” he said.

Asked whether economic managers will change the programmed interest rate figure for 2018, Diokno discounted this.

“It is not necessary especially now that interest rates in the US and abroad are increasing,” he said.

Diokno said this particular issue is periodically being monitored by economic managers.

Last December, the inter-agency Development Budget Coordinating Committee adjusted its 2018-22 foreign exchange from 48-50 to 48-51 due to expected impact of the on-going normalization of US interest rates.

Finance Secretary Carlos Dominguez IIII said improvement of revenue collections in 2017, the first full year of the Duterte administration, is unlike a sports car wherein it immediately goes full blast once you step on the gas pedal.

“This one takes a little time for the government. We are moving in the right direction, I think,” he said.

Dominguez vowed the sustained fiscal situation improvement in the succeeding years.

“This year we’ll even do better. This is cumulative. This will get better and better,” he said, noting that revenue collections exceeded the target.

Government spending last year is short of only 3 percent against the target and Dominguez attributed this to improvements in addressing bottlenecks in the implementation of infrastructure programs, among others, which is laden with issues on right-of-way.

The Finance chief said the current administration decided to solve this issue by tapping the right-of-way organization of the Department of Public Works and Highways for the implementation of Department of Transportation projects.

He said this solution is expected to fast-track infrastructure project implementation, especially now that project pipeline is now full.