The country’s budget deficit declined year-on-year in July due to better revenue collections, the Bureau of Treasury (BTr) said on Wednesday, August 28.
Data from the BTr showed that the national government’s budget deficit dipped by 39.67 percent to P28.80 billion in July 2024 from P47.80 billion last year.
BTr also noted faster revenue growth of 11.09 percent in July compared to a 5.80 percent increase in expenditures.
Year-to-date (YTD), the budget gap stood at P642.80 billion, up by 7.21 percent or P43.20 billion from the same period last year.
Revenue performance
Revenue collections in July amounted to P457.40 billion, 11.09 percent or P45.6 billion higher from last year at P411.80 billion.
Tax collections, which comprised 88.07 percent of the total, grew by 15.46 percent year-on-year while non-tax revenues, accounting for 11.93 percent of the revenues, contracted by 13.20 percent.
The P2.6 trillion cumulative revenue for 2024 surpassed the P2.3 trillion raised in the same 7-month period in 2023 by 14.75% or P335.1 billion.
Of the total 2024 collections, 85.85 percent or P2.2 trillion came from taxes, which grew by 10.99 percent year-on-year.
On the other hand, the non-tax component contributed P368.8 billion, representing 14.15 percent, with a significant 44.47 percent increase year-on-year.
The Bureau of Internal Revenue’s collections grew 17.09 percent growth in its July collection amounting to P319.8 billion, net of P175.0 million tax refund. The agency’s P1.7 trillion total collections as of end-July also grew by 12.70 percent or P189.5 billion compared to last year’s collection of P1.5 trillion.
“The YoY growth was due to higher collections of Value-Added Tax (VAT), income taxes, other domestic taxes, and percentage taxes,” BTr said.
“The growth in VAT collection was partly attributed to base effects as collections last year were lower by around two months’ worth of VAT collection with the shift from monthly to quarterly filing of VAT payments as mandated by the Tax Reform for Acceleration and Inclusion (TRAIN) Law,” it added.
The Bureau of Customs’ (BOC) collection for the month was recorded at P80.4 billion (net of P645.0 million tax refund), registering YoY growth of 9.99% (P7.3 billion). The BOC’s aggregate collection for the first seven months of the year reached P535.9 billion, 5.80% or P29.4 billion higher than the January-July 2023 figure.
BTr attributed BOC’s year-on-year growth to higher collections from VAT, import duties, and excise taxes.
“The positive revenue performance was also driven by peso depreciation, higher value and volume of imports, and higher international crude oil prices when compared with the same period last year,” BTr said.
Expenditures
July disbursements reached P486.2 billion and were 5.80 percent or P26.7 billion higher than what was spent in 2023 partly due to the higher National Tax Allotment (NTA) share of LGUs.
The July outturn contributed to a higher year-to-date expenditure of P3.2 trillion, reflecting a 13.17 percent or P378.3 billion YoY increase in disbursements.
Primary expenditures (net of interest payments) in July reached P406.8 billion, representing a 2.73 percent increase over last year.
Total primary expenditures for the 7-month period amounted to P2.8 trillion. This similarly outperformed the P2.5 trillion posted in the corresponding period a year ago.
Interest Payments (IP) amounted to P79.4 billion in July and increased by 24.99% or P15.9 billion year-on-year.
This was due to the higher cost of financing and depreciation of the peso observed throughout the year. Consequently, total IP as of end-July was also higher at P456.7 billion, up by 31.98 percent or P110.7 billion year-on-year. (TCSP)
