The national government’s budget deficit narrowed to P1.61 trillion in 2022 amid a strong revenue performance last year, data released by the Bureau of the Treasury (BTr) showed.
According to the BTr’s latest cash operations report, the deficit last year fell within the ceiling of P1.65 trillion and the previous year’s level of P1.67 trillion.
The 2022 deficit is equivalent to 7.33 percent of gross domestic product (GDP), down from 8.6 percent in 2021 and below the 7.58 percent program.
The 2022 revenue collections amounted to P3.55 trillion, exceeding the P3.3 trillion program for the year by 7.31 percent.
It is also 17.97 percent higher than that of 2021’s P3 trillion, and it outpaced the 10.4 percent expansion in government spending.
“I commend our revenue agencies for their dedication to reaching and even surpassing their targets. Our fiscal performance has shown that we are right on track with our Medium-Term Fiscal Framework target to reduce the budget deficit to three percent of GDP by 2028, without compromising growth,” Finance Secretary Benjamin Diokno said.
Revenue effort, which covers the share of tax revenues, non-tax revenues and other government agency revenues in relation to GDP, improved to 16.1 percent from 15.5 percent in 2021 and is also higher than the 15.2 percent program.
Tax effort, which is the share of tax collections in relation to GDP, also grew to 14.6 percent from 14.1 percent in 2021 and is above the 14.4 percent target.
Diokno said the Philippines is on track to achieving the goal of raising the tax effort to 17.1 percent by 2028.
Broken down, the Bureau of Internal Revenue improved its collection by 12.39 percent year-on-year, amounting to P2.34 trillion.
However, this was still behind the P2.39 trillion full-year program by 2.38 percent.
Second largest revenue-generating agency Bureau of Customs (BOC) raked in P862.4 billion, outperforming the P643.6 billion raised in 2021 by 34.01 percent and is 19.53 percent above the P721.5 billion target for 2022.
The BTr said BOC’s robust revenue performance was supported by efforts to ensure the recovery of deficient duties and taxes, improved tax compliance, tariffs on rice imports and public auctions of overstaying cargo.
The BTr’s income, meanwhile, reached P154.8 billion, surpassing the P63.4 billion full-year program by 144.05 percent, as well as the 2021 revenue performance by 23.48 percent.
This was largely driven by higher remittances of dividends on shares of stocks, income from bond sinking fund investments, and interest on national government deposits.
Lastly, total collections from other offices, such as other non-tax collections including privatization proceeds, fees and charges amounted to P170.4 billion. This amount surpasses the P101.1 billion program by 68.63 percent with a 23.97 percent increase year-on-year.
The BTr said the upturn was mainly due to the one-off remittances from the Department of Social Welfare and Development and the Philippine Charity Sweepstakes Office, as well as higher collections from the Bases Conversion and Development Authority and the Department of Foreign Affairs.
Total national government disbursements for 2022 expanded to P5.16 trillion from P4.68 trillion a year ago.
The BTr said the 10.35 percent year-on-year growth was driven by the larger national tax allotment shares of local government units in line with the first year of implementation of the Mandanas Ruling; higher capital expenditures mainly from road and transport infrastructure program, and defense modernization projects; personnel services expenses owing to the implementation of the third tranche of Salary Standardization Law V and release of other personnel benefits; as well as interest payments.
Interest payments for 2022 summed up to P502.9 billion, reflecting a 17.1 percent increase from P429.4 billion in 2021 as international and domestic monetary policy tightening to address heightened inflation drove up borrowing rates, the BTr said.
Compared to the program, the full-year actual disbursements outperformed the P4.95 trillion target for 2022 by 4.14 percent, which the BTr said was largely attributed to the faster execution of capital outlay projects amid the lowest coronavirus disease 2019 (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.
“Nevertheless, the better-than-expected revenue and economic performance allowed the government to accommodate the higher spending outturn within the P1.65 trillion deficit program for 2022,” the BTr said.
