|Date||:||March 02, 2017|
|Agency||:||Bureau of the Treasury|
|Title||:||Full-Year National Government Budget Deficit Rises to P353.4 Billion in 2016|
|Article||:||The National Government (NG) incurred a P353.4 billion deficit for 2016, 9% lower than revised program of P388.9 billion but
P231.7 billion higher than the budget deficit recorded in 2015. The outturns reflect strong expenditure growth of 14% resulting from the initiatives of the new administration to ramp up public spending for the second semester, outpacing the 4% increase in revenue collections. Relative to the economy, the deficit is still within the 2.7% revised target, coming in at 2.4% of the GDP. This is significantly higher than the 0.9% deficit to GDP ratio recorded last year, and the highest level posted in the last five years.
Revenue collections for December 2016 reached P165.3 billion, bringing full-year collections to P2,195.92 billion. Full -year Revenues grew by P87.0 billion or 4% for the year, but was still behind the revised program of P2,256.7 billion by 3% with 90% of collections coming from tax sources. Tax collections grew by 9.1%, faster
than the GDP in 2016, reflecting improved efficiency. Tax effort inched up to 13.7% from 13.6% in 2015. Total revenue collections amounted to 15.2% of GDP, just 0.3% short of the 15.5% revised target and 0.5% below the 15.8% revenue effort
The Bureau of Internal Revenue (BIR) collected P117.2 billion for the month, up 10% or P10.9 billion year-on-year (YoY). Full year collections totaled P1,567.2 billion and missed the revised program of P1,620.0 billion by 3% but managed to grow by 9% over the last year. BIR collection is net of the P 8.6 billion tax refund paid to various claimants for the year which includes the partial settlement of tax withheld from the PEACE Bonds amounting to P3.3 billion. Inclusion of the tax refund will drive total collection to P1,575.8 billion.
Collections from the Bureau of Customs (BOC) suffered an 8% drop in December against its 2015 revenue to total P34.8 billion. This mainly on account of lower non-cash collections. Despite this, the agency still managed to post an 8% growth for the full year to bring in a total of P396.4 billion. The growth was not enough to hit
the target of P409.0 billion, however, of which the agency fell 3% short. Adding back the P2.0 billion tax refund will result in total BOC collection of P398.4 billion.
Bureau of the Treasury (BTr) income for the month reached P6.4 billion, 33% lower than the previous year while full year income is down 8% to P101.7 billion. The decline is mainly due to the lower income from BSF/ SSF investments and NG deposits, given the diminished asset holdings of the BSF and lower cash holdings and deposits, respectively. Lower guarantee fee collection and dividend remittance also weighed in on the year-on-
year performance. Despite lower year-on-year income, BTr overshot its revised target by 13% (75% above original).
Collections from other offices (non-tax) registered a 34% contraction for December to total P6.3 billion. Similarly, full year revenue of P113.8 billion also suffered a year-on-year decline
of 38% mainly due to the transfer of the P62.5 billion worth of Coco
Levy Assets in 2015. Exclusion of these assets from the 2015 total will improve the year-to-date drop to only 6% while year-to-
date Total Revenue growth will expand to 7%.
National Government disbursements in December 2016 amounted to P283.6 billion, for a full-year total of P2,549.3 billion. Compared to 2015, total expenditures for full year 2016 grew by 14% or P318.7 billion but missed its revised target of
P2,645.6 billion by 4%.
Interest payments (IP) for December amounted to P19.1 billion, 11% or P2.4 billion lower compared to the December 2015 level and 24% behind the P25.1 billion program for the month. This was mainly due to base effects from the timing of payment for domestic IP in 2015. Total IP for 2016 amounted to P304.5 billion generating savings of P23.3 billion against the P327.7 billion program for the year. Share of IP out of total revenues decreased to 13.9% from 14.7% in the previous
year, indicating improved capacity of the National Government to service its debt. IP comprised 11.9% of total expenditures, lower than the 13.9% recorded in 2015, an indication of a wider fiscal space for productive government spending.
Primary Surplus/ (Deficit)
Net of interest payments, NG achieved a P49.0 billion primary deficit for 2016, a reversal of the P187.7 billion primary surplus re
corded last year. This is still behind the program by 20% or P12.2 billion.