By Chino S. Leyco
Finance Secretary Carlos G. Dominguez III said that the national government did not underspend this year, citing the below ceiling budget deficit in the first four-months of the year was owing to higher revenues from the tax reform law.
Carlos G. Dominguez III
In a statement, Dominguez described that the Duterte administration recorded an “impressive increase in revenues,” particularly on tax collections of the government’s two main tax agencies from January to April this year.
According to Dominguez, the improved tax collection was “a result of the effective implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) Law.”
This enabled the government to sustain its aggressive spending policy without breaching the programmed budget deficit, Dominguez said.
The Bureau of the Treasury reported last week that the national government registered a P105.9-billion deficit at end-April on the back of strong revenue collections despite the surge in government spending.
The actual deficit is lower by P61.2- billion than the P167.1 billion programmed fiscal gap.
“The reason we didn’t exceed our target deficit is because we exceeded our total revenues by P58.2 billion as of the first four months of 2018. Tax revenues from January to April was impressively higher than last year’s collections for the same period,” Dominguez said.
“We have to put this in the proper context,” he pointed out.
At end-April, government spending reached P1.033 trillion, shortfall by P3 billion against the programmed P1.036 trillion disbursements.
But Dominguez said the below target spending was due to interest payments.
The government saved P3.4 billion in interest payments in January to April after it programmed P123.8 billion, but actual payment was only P120.3 billion.
“We didn’t hit our deficit target not because we underspent, but because of revenues. Total spending is lower by P3.0 billion mainly because of the P3.4 billion interest savings. Clearly, there is no underspending as actual non-interest expenditure is higher than the program by P400 million,” Dominguez said.
In the first four-months of 2018, tax revenues amounted to P927.4 billion, higher by P58.2 Billion than the target of P869.2 billion.
The Treasury data showed that the Bureau of Internal Revenue (BIR) sustained its double-digit year-on-year growth in April, with collections amounting to P232.6 billion, up 24 percent from the previous year.
The April tax take brought the BIR’s first four-month tax take to P655.7 billion, better by 17 percent compared with the same period last year.
“Higher excise tax take due to the implementation of the TRAIN law as well as improved and correct valuation and tariff classification drove the robust growth,” the BTr said.
Meanwhile, the Bureau of Customs collected P46.8 billion in April, an increase of 50 percent year-on-year, and the its highest since the start of the Duterte Administration.
In January to April, the Customs bureau’s collection jumped 31 percent over the last year to P176.6 billion.
Non-tax revenues surged during the said period as well.
At end-April, the Treasury’s income reached P37.0 billion, up 23 percent from a year ago. Non-tax revenue from other offices amounted to P50.4 billion, up 32 percent year-on-year.