The government posted a budget surplus of P2.6 billion in May, a reversal of the P32.9-billion deficit a year ago, as strong revenue collections outpaced government spending which was exacerbated by the delay in the approval of the 2019 national budget.
Data from the Bureau of the Treasury showed this was the third month that a budget surplus was recorded this year.
“This brought the cumulative deficit for the first five months to only P809 million, far lower than the P138.7-billion budget gap recorded for the comparative period last year, mainly caused by the delay in the approval of the 2019 budget,” the Treasury said.
ING Bank Manila senior economist Nicholas Mapa said that after holding back the first-quarter GDP growth at 5.6 percent, “the ill effects of the budget delay appear to have seeped into the second quarter with the May budget surplus hitting P2.6 billion.”
“With government spending curtailed for the most part of the current quarter, the government is scrambling to implement ‘catch up’ spending for the second half of the year. The month of May has been a deficit month for the last three years with the economy getting a nice boost from the government to complement mainstay household consumption growth,” Mapa said.
He said with capital formation still likely to post lackluster numbers as evidenced by anemic car sales and weaker imports of capital goods and raw materials, second-quarter GDP would likely need to lean on household consumption heavily yet again.
Revenue collections in May climbed 22.5 percent to P317.2 billion from a year ago as a result of improved collections by major revenue generating agencies. This brought the five-month collections to P1.313 trillion, up by 10.7 percent from a year earlier. Tax revenues accounted for 89.1 percent of the total.
Collections from tax and non-tax sources improved by 9.7 percent and 19.6 percent, respectively, compared to the same period last year.
The Bureau of Internal Revenue raised P204.8 billion in May, up 19.1 percent year-on-year, which was the highest growth attained by the agency in the first five months of 2019. Cumulative revenues as of end-May rose 9.8 percent or P80.8 billion to P908.5 billion.
The Bureau of Customs collected P58.2 billion in May, or 10.3 percent higher than P52.7-billion it hauled in in May 2018. Customs collection grew 9.8 percent in the first five months to P251.7 billion.
The Bureau of the Treasury generated P35.7 billion in May, or 66.8 percent higher than last year. The growth was propelled by higher dividends on shares of stocks. Cumulative BTr income as of end-May amounted to P77.0 billion, up 31.9 percent year-on-year.
Non-tax collections from other offices in May went up 50.4 percent over the last year and totaled P16.1 billion, leading to a year-to-date collection of P66.3 billion for 7.9-percent growth.
Meanwhile, the government disbursed P314.7 billion in May, recovering from the contraction recorded in the previous months and increasing by 7.8 percent or P22.8 billion from the comparable figures in 2018.
“Expansion for the period was attributed to the implementation of the last tranche of salary increase of government personnel, including the release of mid-year bonus and the execution of new programs in line with the approval of the 2019 GAA in mid-April,” the Treasury said.
Cumulative 2019 disbursement reached P1.314 trillion. “Although still below by 0.8 percent year-on-year, spending as of end-May improved from the 3.2-percent contraction posted during the first four months of the year,” the Treasury said.
Interest payments in May amounted to P19.7 billion, 6.8 percent or P1.4 billion lower than the previous year on account of matured treasury bonds and settlement premium on reissued bonds.
The government’s primary surplus reached P150.2 billion in the first five months, higher by P147.5 billion against its level in the same period last year.