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Monday, May 20, 2024

2023 budget deficit hit P1.5 trillion

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The national government incurred a P1.512-trillion budget deficit in 2023, exceeding its target by 0.85 percent but down 6.32 percent from the previous year, according to data from the Bureau of Treasury (BTr).

Revenue collection grew 7.86 percent in 2023, outpacing the 3.42-percent increase in government spending. The 2023 deficit represented 6.2 percent of the gross domestic product (GDP), exceeding the 6.1 percent program but lower than the 7.3 percent recorded in 2022, indicating progress in fiscal consolidation.

The budget deficit in December 2023 widened 5.97 percent, or P22.6 billion, to P401.0 billion year-on-year resulting from the 2.24-percent rise in expenditures alongside a 3.03-percent decline in revenue haul.

Government’s revenue collection amounted to P3.824 trillion in 2023, up by 7.86 percent from a year ago, driven by improvements in both tax and non-tax revenue.

The 2023 outturn also exceeded the P3.729 trillion program by 2.55 percent, driven by over performance of non-tax collections.

Broken down, 89.68 percent was taxes which grew 6.49 percent year-on-year. Non-tax sources accounting for the balance of 10.32 percent, or P394.8 billion, topped the previous year’s outcome and were more than double the program for the year.

Collection in December amounting to P260.1 billion slid 3.03 percent, or P8.1 billion.

The Bureau of Internal Revenue (BIR) collected P2.517 trillion in 2023, showing a 7.76-percent increase from the previous year’s P2.336 trillion.

It fell short of the P2.639 trillion program by 4.63 percent (P122.2 billion) in large part due to the shift in the schedule of the value-added tax remittance implemented in January 2023.

Full-year collections by the Bureau of Customs (BOC) amounted to P883.2 billion (net of P4.2 billion tax refund), up by 2.41 percent over P862.4 billion in 2022 and 1.04 percent (P9 billion) above the P874.2 billion 2023 program.

Primary expenditures, which accounted for 88.23 percent of the total 2023 expenditures, increased 1.10 percent to P4.708 trillion from 2022’s P4.657 trillion and were 1.95 percent above the target of P4.618 trillion.

Primary spending in December 2023 settled at P600.4 billion, a marginal decline of 0.43 percent over the same month in 2022.

The lower national tax allotment shares of local government units in 2023 weighed down on the overall growth of spending. Other productive expenditures, particularly infrastructure and other capital outlays, and personnel services expenses, helped buoy government disbursements in 2023.

Debt interest payments (IP) in 2023 reached P628.3 billion, up by 24.95 percent (P125.5 billion) over the 2022 level, caused by the tightening of global funding conditions and the impact of higher borrowing to provide stimulus during the pandemic.

The actual IP was also above the full-year program by 2.89 percent on additional policy rate tightening throughout 2023 brought about by stubborn inflation.

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