As of end-October 2014
Philippine fiscal performance continues to be robust.
Total revenues for the month of October surged to Php152.3 billion, some13.4% increase from the same month in the previous year. This came as a result of increased collections by the BIR, BOC and BTr. For the past 10 months, total revenues totalled nearly Php1.6 trillion, 12.6% higher than the same period in the prior year. Over the same period, BIR collections grew by 10.5% ; BOC, 18.8% and BTr, 21.0%.
Table 1. National Government Fiscal Position
(in billion pesos, except for growth rates)
|
October
|
% Change
|
January – October
|
% Change
|
||||||
|
2013
|
2014
|
2014
|
2013
|
2014
|
2014
|
||||
|
Revenue |
134.3 | 152.3 |
13.4
|
1,400.9 | 1,577.3 |
12.6
|
|||
|
Tax |
124.7 | 146.5 |
17.5
|
1,258.8 | 1,420.3 |
12.8
|
|||
|
BIR |
95.6 | 101.8 |
6.5
|
993.5 | 1,098.2 |
10.5
|
|||
|
BOC |
27.9 | 34.2 |
22.7
|
252.5 | 300.0 |
18.8
|
|||
|
Other Offices |
1.2 | 10.5 |
748.1
|
12.7 | 22.1 |
73.4
|
|||
|
o.w. BTr |
3.6 | 5.8 |
62.0
|
71.7 | 87.1 |
21.0
|
|||
|
Non-Tax |
9.6 | 5.8 |
-39.7
|
142.0 | 156.9 |
10.5
|
|||
|
Expenditure |
145.5 | 154.8 |
6.4
|
1,513.3 | 1,610.9 |
6.5
|
|||
|
Deficit |
(11.2) | (2.5) |
-77.8
|
(112.5) | (33.6) |
-70.2
|
|||
|
Source: BTr; DOF |
|||||||||
Cash disbursements for the month of October has modestly increased by 6.4%, reversing the negative growth it incurred in the same month of the previous year. For the first ten months of fiscal year 2014, total expenditures totalled Php1.6 trillion, 6.5% more than total expenditures during the same period of the prior year.
With revenues increasing at a faster pace than expenditures, the deficit has narrowed drastically. For the month of October, the registered deficit of Php2.5 billion was nearly 78% less than the deficit in the same month of 2013. Total deficit during the first ten months of the current year amounted to Php33.6 billion, 70% less than what the national government incurred in the same period of 2013.
Revenue elasticity, the ratio between percentage change in collections and percentage change in nominal GDP, dropped due to the export-oriented nature of growth. Lightly taxed exports grew 11.1% compared with 5.8% for real GDP. During the first three quarters of fiscal year 2014, total revenue elasticity, adjusted for exports, stood at 1.36 from 1.39 last year.
The BOC revenues, however, compensated for the BIR revenues lowered elasticity. BOC improved its revenue elasticity from 0.56 in the first three quarters of 2013 to more than 2 in the same period of 2014.
Table 2. Revenue Elasticity and Nominal GDP Growth Rate
|
2012
|
2013
|
Q1-Q3 2013 | Q1-Q3 2014 | |
|
Total Revenue |
1.45 | 1.27 | 1.45 | 1.37 |
|
Tax Revenue |
1.50 | 1.38 | 1.51 | 1.35 |
|
BIR |
1.64 | 1.62 | 1.39* | 1.36* |
|
BOC |
1.06 | 0.56 | 0.56 | 2.01 |
|
Nominal GDP Growth Rate (%) |
8.85 | 9.29 | 9.13 | 9.12 |
|
Sources of Basic Data: BTr; DOF; NSCB |
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*Adjusted for export value added
Overall fiscal performance exceeded the DBCC target. Total revenue effort for the first three quarters has reached 15.75%, higher than the 15.7% DBCC target. This is due to robust non-tax revenues which exceeded DBCC target by 0.57 percentage point.
Table 3. Fiscal Performance Indicators
|
2012
|
2013
|
Q1-Q3 2014
|
DBCC 2014 Target
|
|
|
Total Revenue Effort |
14.53 | 14.86 | 15.75 | 15.70 |
|
Tax Revenue |
12.88 | 13.30 | 14.08 | 14.70 |
|
BIR |
10.01 | 10.54 | 11.02 | 11.40 |
|
BOC |
2.74 | 2.64 | 2.94 | 3.20 |
|
Other Offices |
0.13 | 0.12 | 0.13 | 0.10 |
|
Non-tax |
1.64 | 1.56 | 1.67 | 1.10 |
|
Expenditure as % to GDP |
16.83 | 16.28 | 16.10 | 17.70 |
|
Deficit as % of GDP |
(2.30) | (1.42) | (0.34) | (2.00) |
|
Source of Basic Data: NSCB; BTr; DOF |
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DOF View
The fiscal sector has room for improvement. While the revenue side may be considered to be on its way to meet its target as set by the DBCC, the expenditure side still has headroom for expansion.
If the country attained the 2.0% deficit target as of end-September (actual was 0.3% deficit), GDP growth would have been 7.5%. (5.8% actual plus 1.7% unused deficit.) Accordingly, revenues would have risen closer to the DBCC target.
