Purisima: Being able to finance a better future is a direct result of Aquino’s good governance drive
The National Government recorded a budget deficit of P121.7 billion for 2015, as both revenues and expenditures expanded by 11% and 13%, respectively. The deficit incurred is equivalent to 0.9% of GDP, 0.3 percentage points (ppts) higher than the year prior. Netting out interest payments, the primary balance for 2015 was at a surplus of P187.7 billion, 140% or P109.5 billion above target.
Finance Secretary Cesar V. Purisima said, “For the past 5 years, consistently prudent and strategic fiscal management has afforded Filipinos a better future. Today, we have more fiscal firepower for multigenerational investments in our people, weaving stronger social safety nets and better connectivity links across the archipelago.
This is the direct result of good governance–a marked break from the past that we ought to continue towards the next administration.”
Tax to GDP ratio improves to 13.7% as revenues sustain robust growth
Driving the improvement of the country’s tax to GDP ratio to 13.7% are strong revenue collection figures, amounting to P2,109.0 billion for the year, higher by 11% or P200.4 billion year-on-year. December revenue collections totaled P163.5 billion.
The Bureau of Internal Revenue (BIR) collected P1,441.6 billion for the year, 7% or P98.5 billion higher than 2014 figures. The Bureau of Customs (BOC) raised P367.5 billion, similar to year-ago figures. As the price of oil fell to record-low levels this 2015, collections on oil sagged by as much as 31%. This was compensated for by non-oil collections, up 9.3% from year-ago levels.
Purisima remarked, “President Benigno S. Aquino III will perhaps be remembered in history as one of the few leaders who have managed to significantly expand fiscal space without imposing any new income or value added tax (VAT) increases on his people. We have almost doubled government tax revenues in 6 years through through tax administration and enforcement reforms to improve collections and passing a landmark sin (excise) tax reform law last 2013. We also reduced interest rates with bolstered confidence in our credit rating, and reduced corruption in various levels of the bureaucracy, proving that good governance can indeed deliver solid wins in our balance sheet for our people.
The next administration may very well consider engaging in genuine, comprehensive reform of the tax structure, but better tax administration and enforcement must continue to be integral to the nation’s revenue growth strategy.”
December collections for the BIR and the BOC amounted to P106.3 billion and P37.8 billion, respectively.
The Bureau of the Treasury generated an income of P110.0 billion for 2015, 81% or P49.4 billion above program and 18% or P16.6 billion year-on-year. “The Treasury has been consistently performing in top shape, attuned to the global market and striking at the most opportune time. Our people now have a more resilient and healthy debt profile helping, and no longer hurting, our macroeconomic standing,” Purisima noted.
Interest payments to expenditure ratio falls to 13.9% from 16.2% a year ago
National Government expenditures in 2015 amounted to P2,230.6 billion, widening by 13% or P249.0 billion year-on-year. December disbursements stood at P238.7 billion, 7% or P15.6 billion above program and 9% or P19.3 billion better than year-ago figures.
Total interest payments for 2015 reached P309.4 billion, generating savings of P52.5 billion if compared with the P361.8 billion program for the year. This is 4% or P11.8 billion lower than payments made last year.
“As a percentage of expenditures, interest payments fell by 2.3 percentage points to 13.9% for the year from 16.2% the year prior. Persistent narrowing of our interest payments to expenditure ratio means we have much more money available for productive expenditures,” Purisima added.
Purisima sounded a cautiously optimistic note for the years ahead, saying, “Filipinos have demography, natural resources, and talent on our side. There is no reason why we can’t succeed if we stick to our unwavering commitment to good governance. Over the past 6 years we have cleaned up and strengthened our institutions, the key ingredient of successful economies. While the work is far from over, today we move ever forward on firmer fiscal footing.”