THE NATIONAL Government’s (NG) budget surplus narrowed in January, as state spending growth outpaced that of revenue collection, the Bureau of the Treasury (BTr) said.
In a statement, the Treasury said the NG posted a P68.4-billion budget surplus in January, 22.27% lower than the P88-billion surplus a year ago due to “sustained revenue growth alongside increased expenditures.”
Month on month, the budget balance swung to a surplus from the P329.5-billion deficit in December last year.
This was the first budget surplus posted since the P6.34-billion surplus in October 2024.
In January, revenues grew by 10.75% to P467.1 billion from P421.8 billion in the same month in 2024, amid higher tax collections.
Tax collections, which make up 93.66% of total revenues, rose by 13.6% to P437.5 billion in January from P385.2 billion in January 2024.
The bulk of tax revenues came from the Bureau of Internal Revenue (BIR) whose collections went up by 15.13% to P355.1 billion in January from P308.4 billion in the same month in 2024.
The growth in BIR collections was driven by the 18.62% or P21.4 billion increase in value-added tax (VAT) and a 14.23% or P18.1 billion rise in income taxes.
Other taxes went up by 22.2% or P3.7 billion, while percentage taxes jumped by 11.88% or P3.4 billion.
“The growth is also attributed to the bureau’s intensified collection efforts, aggressive illicit trade campaigns, and digital transformation projects,” the Treasury said.
Meanwhile, the Bureau of Customs (BoC) generated P79.3 billion in revenues in January, up 7.98% year on year, driven by the agency’s modernization program.
“Notably, VAT collections surged by 17.55% (P7.7 billion), while excise collections grew by 10.10% (P1.8 billion), helping to counterbalance the reduction in duty collections due to lower tariffs on rice imports under Executive Order (EO) No. 62,” the BTr said.
In July 2024, EO 62 reduced import tariffs on rice to 15% until 2028, as well as extended the lower tariff rates on pork, corn, and mechanically deboned poultry meat.
It also extended the zero-tariff policy on electric vehicles and their parts through 2028, as well as expanded the coverage to include other types of e-vehicles.
Collections by other offices slipped by 4.58% to P3.2 billion in January.
On the other hand, nontax revenues plunged by 19.16% to P29.6 billion, “largely due to the base effect of one-time gains recorded in the year prior.”
However, the BTr said the Treasury’s revenues “remained relatively strong” despite the 5.92% year-on-year decline to P15.7 billion in January.
The 34.62% year-on-year rise in the NG’s share in the Philippine Amusement and Gaming Corp.’s profits provided a “positive boost,” the Treasury added.
Collections by other offices also dropped by 30.3% to P13.9 billion.
Meanwhile, state spending rose by 19.45% to P398.8 billion in January from P333.9 billion in the same month last year.
“This robust spending performance resulted mainly from the disbursements attributed to progress billings of completed infrastructure and other capital outlay projects of the Department of Public Works and Highways (and) implementation of various health and social protection programs,” it said.
The BTr attributed the faster spending to expenses related to preparations for the May 12 national and local elections.
“Higher National Tax Allotment (NTA) releases and subsidies to government corporations also contributed to the significant growth of disbursements in January,” the Treasury said.
Primary spending — which refers to total expenditures minus interest payments — jumped by 13.37% to P294.4 billion in January from P259.6 billion a year ago. It accounted for 73.82% of disbursements during the month.
The BTr said that the rise in interest payments “merely reflects a shift in coupon payment timing due to the issuance strategy of multiple re-offerings of Treasury bonds originally issued in January last year to improve secondary market trading activity.”
Interest payments surged by 40.71% to P104.4 billion in January from P74.2 billion last year.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said there has been a budget surplus in the month of January in recent years after “large deficits” seen in December.
However, he noted that the budget balance will likely revert to a deficit in February onwards.
Mr. Ricafort also attributed the faster government spending to preparations for the elections.
“One measure that would help reduce the NG’s budget deficit and also reduce additional borrowings/overall debt by the NG would be the increased remittance of dividends and surplus by some government-owned and -controlled corporations to the NG, if allowed under the law/respective charters,” he said. — Aubrey Rose A. Inosante
