Budget swings backs to surplus in May

MANILA, Philippines — The government generated a P2.6 billion fiscal surplus in May, a reversal of the deficit incurred last year as the growth in revenues outpaced the increase in public expenditures, according to the Bureau of the Treasury.

According to the latest cash operations report of the BTr, the national government’s fiscal balance settled at a surplus of P2.6 billion in May, a turnaround from the P32.9 billion deficit registered in the same month in 2018.

This brought the cumulative deficit for the first five months to P809 million, narrower than the P138.7 billion budget gap recorded for the comparative period last year. The BTr attributed the contraction mainly to the delay in the approval of the 2019 budget.

A fiscal surplus occurs when the government generates more revenues that the funds it spends, while a deficit is incurred when disbursements exceed revenues.

According to BTr data, government revenues grew by 22.5 percent in May from a year ago level, far outpacing the 7.8 percent increase in spending.

Revenue collections rose to P317.2 billion from P259 billion in the same month last year, as a result of improved collections by major revenue generating agencies, the BTr said.

In particular, the Bureau of Internal Revenue (BIR) raised P204.8 billion in May, up 19.1 percent from P172 billion a year ago. This was the highest growth attained by the agency in the first five months.

The Bureau of Customs’ collections also climbed by 10.3 percent to P58.2 billion from P52.7 billion in May 2018.

The BTr, itself, generated P35.7 billion, 66.8 percent higher compared to last year’s level of P21.4 billion. The agency said this growth was driven by higher dividends on shares of stocks, which jumped by 89.5 percent year-on-year to P30.8 billion. Of this amount, P16.2 billion was contributed by the Philippine Amusement and Gaming Corp.

Non-tax collections from other offices also surged by 50.4 percent year-on-year to reach P16.1 billion last month.

Total revenue collections as of end-May increased by 10.7 percent to P1.31 trillion from P1.19 trillion a year ago.

Meanwhile, the BTr reported that government disbursement in May amounted to P314.7 billion, 7.8 percent higher than the P291.9 billion in the same month in 2018. The

 BTr said this represents a recovery from the contraction in public spending in the previous month.

“Expansion for the period was attributed to the implementation of the last tranche of salary increase of government personnel, release of mid-year bonus, and the execution of new programs in line with the approval of the 2019 GAA (General Appropriations Act) in mid-April,” the Treasury said.

Interest payments (IP) in May amounted to P19.7 billion, 6.8 percent lower than the previous year on account of matured treasury bonds and settlement premium on reissued bonds.

This means primary spending for the month reached P295 billion, nine percent higher than last year’s figure.

With the May performance, cumulative 2019 disbursements in the first five months of the year reached P1.31 trillion, the BTr said. This is, however, still down by 0.8 percent from the P1.33 trillion spent in the same period last year. 

Netting out interest payments from expenditures, the national government recorded a P22.2 billion primary surplus in May, reversing the P11.8 billion primary deficit recorded in the same month in 2018.

Year-to-date, NG’s primary surplus reached P150.2 billion, which is significantly higher than the P2.7 billion surplus seen a year ago.