Yr-to-date shows deficit widens sharply
The national government recorded a larger budget surplus in April than a year earlier due to a sharp contraction in public expenditures, combined with a seasonal increase in tax collections, the Bureau of the Treasury (BTr) said on Tuesday.
In the January to April period, however, the government still recorded a wider fiscal deficit than the shortfall a year earlier.
The government’s latest cash operations report showed the budget surplus amounted to P67.3 billion in April, or 57.51 percent more than the P42.7 billion surplus in the year-earlier period.
Tax collections in April, meanwhile, rose year-on-year, driven by the annual tax filing deadline on April 15.
However, total revenues, which include tax and nontax collections, actually eased by a slight 2.82 percent to P522.1 billion from P537.2 billion in the comparative period. The BTr attributed the decline to the timing of nontax collections.
Expenditures for the month of April saw a much bigger drop than
the decline in revenues, falling by 8.03 percent to P454.8 billion from April 2024’s P494.5 billion.
Yr-to-date
In the year-to-date, the government still recorded a wider fiscal deficit of P411.5 billion, or 78.98 percent greater than the budget shortfall of P229.9 billion from January to April 2024.
Expenditures in the year-to-date still recorded a 13.57 percent rise, despite the contraction in April, to P1.932 trillion from the previous year’s P1.701 trillion.
Revenues in the first four months of the year increased by 3.35 percent to P1.52 trillion from P1.47 trillion in January to April 2024, with the BTr stating that the government remains on track to meet its overall collection goals this year.
Nontax take drags revenues
The government’s tax revenues alone rose by 7.84 percent in April to P498 billion from P461.8 billion a year ago. However, nontax collections plunged 68.08 percent to P24.1 billion from P75.4 billion in April 2024, contributing to the decline in overall revenues.
“This is because most government-owned and controlled corporations have yet to remit dividends (as of April), unlike the same period last year,” the BTr said.
As a result, the year-to-date nontax collections stood at P90.7 billion, 51.94 percent lower than last year’s four-month total of P188.8 billion.
Tax filing season booster
Meanwhile, the Bureau of Internal Revenue’s (BIR) collection in April reached P420.5 billion, posting a double-digit increase of 11.1 percent from P378.5 billion a year earlier.
“This strong performance was driven by higher collections from corporate income tax (CIT), value-added tax (VAT), and personal income tax (PIT). The surge in CIT collections was primarily due to the annual tax filing deadline for corporations in April,” the BTr said.
“Meanwhile, PIT and VAT collections improved on the back of the BIR’s intensified efforts to simplify tax filing through enhanced digital services. The increase in VAT collections was also supported by the Bureau’s crackdown on the use of fake receipts and its continued campaign against illicit trade,” it added.
According to the BTr, these factors, along with higher excise tax collections, contributed to the BIR’s year-to-date performance, which reached P1.111 trillion, up 14.5 percent compared with P970.3 billion generated in the same period last year.
“Fundamentally, budget surpluses are expected during the month of April in a given year during the tax collection/filing month on a yearly basis.
Budget surpluses could reduce the need for additional borrowings/debt by the national government, on a cash flow perspective,” Michael Ricafort, Rizal Commercial Banking Corp. chief economist, said.
BOC collections fall
The Bureau of Customs (BOC) collected P74.7 billion in April, a 7.48 percent drop from the P80.7 billion collected in the same month in 2024.
“This is partly due to the fewer working days for the month and the impact of lower import volumes amidst global trade challenges,” the BTr said.
Holy Week fell in April this year, whereas it was observed in March last year.
Nevertheless, BOC’s overall collection for the four-month period reached P306.1 billion, exceeding last year’s P299.6 billion by 2.16 percent.
“This reflects the BOC’s efforts to facilitate legitimate trade, secure borders, modernize customs processes and uphold stringent security measures,” the BTr said.
Expenditures narrow
Meanwhile, the BTr said the 8.03 percent decline in expenditures in April was largely due to lower interest payments, as well as subsidies to government corporations, particularly for the National Irrigation Administration.
“The timing of transfer of the capitalization requirement of the Coconut Farmers and Industry Trust Fund also weighed on the growth of April spending. In the previous year, the transfer was taken up in April while this year’s capitalization requirement was released in March,” the BTr said.
Primary expenditures, or government spending excluding interest payments, in April were at P408.3 billion, 4.37 percent lower than the previous year’s level of P427 billion.
The four-month total primary expenditures of P1.644 trillion showed a 14.16 percent increase from the prior year’s outturn of P1.44 trillion.
Interest payments for April reached P46.4 billion, a 31.19 percent decline from last year’s P67.5 billion, according to the BTr. The decline was mainly due to the shift in the timing of payments for both domestic securities and external loans, which coincided with the Lenten and Eid al-Fitr holidays.
As of end-April, total interest payments increased to P287.4 billion, 10.35 percent higher compared with last year’s figure of P260.5 billion.
Excluding interest payments, the national government recorded a P113.7 billion primary surplus for the month, compared with a primary surplus of P110.2 billion in the previous year.
The primary balance for the four-month period shifted to a deficit of P124.1 billion, in contrast to the P30.6 billion primary surplus recorded the year before.
