TRAIN revenue drives up cash surplus 5-fold to P10.2 billion in January

MANILA, Philippines — Increased revenues brought about by the new tax reform law spurred the national government’s cash position to end with a P10.2 billion surplus last January almost five-fold the P2.2 billion surplus it recorded in the same month last year, the Bureau of the Treasury (BTr) said yesterday.

Based on the latest cash operations report of the BTr, the fiscal surplus in the first month of the year widened as growth in revenues outpaced the increase in expenditures during the period.

Revenues rose 19 percent to P238.9 billion as compared to the P200.3 billion collected last year. Disbursements, meanwhile, increased 15 percent to P228.7 billion from P198.1 billion in the same month last year.

“Strong revenue growth propelled the national government to achieve a fiscal surplus of P10.2 billion for the first month of 2018. With revenue posting 19 percent year-on-year growth against expenditure growth of 15 percent, the resulting surplus is almost five times higher than that recorded a year ago,” the Treasury said.

Budget Secretary Benjamin Diokno said higher fiscal surplus was a result of the “over-performance” of the revenue generating agencies. He said government collections and spending remain on track.

“It should be seen in a positive light. Government is on track. But it is the over performance on the revenue side that is responsible for the jump in the national government surplus,” Diokno said in a text message.

Emilio Neri, chief economist at the Bank of the Philippine Islands, also attributed the widening surplus to the incremental tax collections as a result of the Tax Reform for Acceleration and Inclusion (TRAIN) Law. He also cited the improved government spending during the period.

“It is very likely due to the windfall from TRAIN. Spending ramped up as well so we shouldn’t be wary of underspending issues,” Neri said.

According to Treasury data, revenues in January 2018 grew as all revenue-generating agencies posted positive increments in their collection during the period.

The Bureau of Internal Revenue (BIR) raised P175.6 billion in revenues, 19 percent up more than P147.4 billion collected in the same month last year.

“The growth was mainly driven by the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) which took effect on Jan. 1, 2018,” the BTr said.

Revenues generated by the Bureau of Customs (BOC) also rose 14 percent to P40.8 billion on the back of improved revenue efficiency, as well as the intensified anti-corruption and anti-smuggling drive of the bureau, the BTr said.

Income from the BTr also slightly increased to P8.1 billion due to the higher income from national government deposits, as well as remittances of dividends from state corporations, particularly the Philippine Amusement and Gaming Corp. and the Manila International Airport Authority.

Non-tax collections from other offices surged 71 percent to P13.1 billion, mainly due to improved collection, the BTr said.

Meanwhile, the Treasury attributed the improved government spending in January to the implementation of the administration’s infrastructure program, as well as the third tranche increase in the pay of government personnel under the Salary Standardization Law.

“Ramped up infrastructure spending, as well as the implementation of the third tranche of compensation adjustment for government employees contributed to the month’s performance,” the BTr said.

However, the BTr has not yet provided the breakdown of the government’s spending on infrastructure and personnel services.

BTr data, however, showed interest payments reached P43.5 billion for the month, while remaining components of the total expenditures accounted for P185.2 billion.

Interest payments, for its part, rose three percent year-on-year due to coupon payments for debt papers issued in 2017, including retail Treasury bonds.

Despite the increase, the BTr said the share of interest payments to total expenditures went down to 19 percent, against the previous year’s 21 percent, showing that “growth in disbursements were for productive components of the budget.”

Netting out interest payments from expenditures, the BTr said the national government achieved a P53.7 billion primary surplus for January, 20 percent up from last year’s P44.6 billion.

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