By Francis Allan L. Angelo
The Philippines’ Department of Finance (DOF) Secretary Ralph Recto announced an unexpected fiscal windfall in the early months of 2024.
“As of today, for the last two months and a half, our revenues are 20 percent up year-on-year (YOY) while spending is 10 percent up YOY, so we do have a surplus,” Recto said.
Recto shared the information during the World Economic Forum (WEF) Roundtable on March 19, 2024.
The Bureau of the Treasury’s report, released on March 15, 2024, also painted a promising picture of the nation’s economic stance. January alone saw the government post a budget surplus of PHP88 billion, which is a striking rise of over 90 percent from January 2023’s PHP45.7 billion.
The report attributes this increase to a surge in total revenues, which reached PHP421.8 billion, an improvement from the prior year’s PHP348.2 billion, while the government spending was recorded at PHP333.99 billion.
The financial upswing is largely credited to the BIR and BOC’s enhanced tax collection efforts, which Secretary Recto is keen on supporting through data analysis.
“We’re assisting the BIR and BOC by analyzing all the data and provide them with that data as well, where to concentrate to collect the taxes and to whom they should be collecting the taxes from,” he said.
Such targeted measures have resulted in improved efficiency in tax collection and have significantly contributed to the fiscal surplus.
Recto’s confidence in the country’s fiscal trajectory is not unfounded. The Development Budget Coordination Committee projects that revenues could reach PHP4.3 trillion this year, an ambitious yet plausible target given the recent performance.
The increased revenue is particularly noteworthy given the 31.35% rise in collections by the BIR and the 3.98% increase by the BOC, the latter benefitting from system enhancements and more effective border control measures.
However, this economic success story is not without its challenges. Non-tax revenues saw an 8.68% decline, with the Bureau of the Treasury reporting lower interest income.
Moreover, a 58.02% rise in interest payments due to the reissuance of Treasury Bonds and Global Bonds points to an area that requires prudent management to sustain the fiscal momentum.
The fiscal data speaks volumes about the Philippines’ resilient economic management amidst a complex global economic landscape. The impressive primary surplus of PHP162.2 billion, excluding interest payments, is testament to the country’s adept handling of its fiscal policy and its commitment to revenue generation and controlled expenditure.
With the DOF’s ongoing efforts to refine tax collection processes and the broader government’s strategy on fiscal management, the Philippines is well-positioned to continue its trajectory of economic strength.
Indeed, with eyes set on the rest of 2024, the Philippines’ economic outlook seems bright, with a promising start that suggests a year of robust growth and sustained fiscal discipline.
“So far, we’re hitting the numbers, surpassing the targets, and we hope that continues,” Recto said.
