Gov’t back to fiscal surplus in April

MANILA, Philippines — The government reverted to a fiscal surplus in April, boosted by the seasonal uptick in revenues during the income tax filing month, although the excess was smaller compared with a year ago due to faster spending.

Data from the Bureau of the Treasury released on Thursday showed that the Marcos administration had recorded a budget surplus of P42.7 billion in April.

However, the surplus in April was 36.03 percent smaller year-on-year. It was also not enough to reverse the four-month deficit tally of P229.9 billion, which was up by 12.66 percent.

A budget surplus happens when revenue collections outpaced spending growth, while a deficit means the reverse happened.

READ: Recto not dreaming of full-year budget surplus

A surplus historically occurs in April as people and enterprises file annual income tax returns, giving revenues an extra push.

State receipts amounted to P537.2 billion in April, climbing by 21.9 percent. This brought the year-to-date revenues to P1.5 trillion, marking a 16.8-percent increase.

Collections up 21.9 percent

Broken down, collection of the Bureau of Internal Revenue (BIR), which historically accounts for 80 percent of state revenues, rose by 12.65 percent to P378.5 billion in April as both income tax and value-added tax posted double-digit growth. Since the beginning of the year, the BIR has raised P970.3 billion, up by 15.35 percent.

The Bureau of Customs collected P80.7 billion from import duties and other fees during the month, increasing by 19.52 percent. This pushed up its cumulative receipts by 6.47 percent to P299.6 billion.

READ: BIR, Customs collections rose in April

Meanwhile, government spending in April amounted to P494.5 billion, jumping by 32.25 percent mainly due to subsidies released to state-run corporations to fund their projects and programs. So far this year, disbursements have reached P1.7 trillion, beating the previous year’s performance by 16.22 percent.

For Robert Dan Roces, an economist at Security Bank, the spending pickup in April bodes well for economic growth.

“It is expected that government spending will further pick up in the second quarter and beyond. This increased spending will stimulate economic activity, create jobs, and reverse the country’s growth trajectory, which showed a slowdown in private consumption and capital formation,” Roces said.

“However, the pace and magnitude of the spending will depend on the government’s priorities, the absorption capacity of implementing agencies, and the overall fiscal space,” he added.

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The Marcos administration had announced a bigger borrowing plan for this year at P2.57 trillion—from the old program of P2.46 trillion—as the government raises funds to plug a bigger-than-previously-expected budget hole of P1.5 trillion.

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