Lower govt deficit due to higher revenues and better expenditure performance is a strong indication that debt level continues to stabilize – Diokno

Finance Secretary Benjamin E. Diokno has noted that the narrowing National Government (NG) deficit for the first nine months of 2023 due to higher revenue collections and better expenditure performance is a strong indication that the country’s debt-to-GDP ratio will continue to stabilize.

According to the Bureau of the Treasury’s (BTr) September 2023 cash operations report, NG fiscal deficit saw a 2.9 percent improvement to PHP 983.47 billion in the first three quarters of 2023 from the PHP 1.01 trillion recorded during the same period in 2022.

Year-to-date, the deficit figure is only 66 percent of the PHP 1.50 trillion full-year program.

“The lower deficit outturn indicates that NG debt-to-GDP ratio will continue to stabilize and allow the country to remain on track to achieving the Medium-Term Fiscal Framework (MTFF) target of 61.2 percent for 2023 and less than 60 percent by 2025,” Finance Secretary Diokno noted.

Total revenues for the first nine months reached PHP 2.84 trillion, a 6.8 percent increase from the PHP 2.66 trillion collected in the same period last year.

Total revenues collected for the said period is already 76.1 percent of the Development Budget Coordination Committee’s (DBCC) full-year revenue program of PHP 3.73 trillion.

Taxes made up the majority of NG revenues from January to September 2023, which improved by 6.4 percent year-on-year (YOY) to PHP 2.54 trillion.

In particular, the Bureau of Internal Revenue (BIR) grew its collections to PHP 1.86 trillion from January to September 2023, outperforming its collection for the same period last year by 7.3 percent.

However, BIR’s collection for the first three quarters of 2023 was slightly lower than the program by 3.9 percent, mainly due to the second tranche reduction of personal income tax (PIT), immediate expending of input value added tax (VAT) on capital goods, and timing of VAT filing that shifted from monthly to quarterly basis starting this year under the Tax Reform for Acceleration and Inclusion (TRAIN) Act.

On the other hand, the Bureau of Customs’ (BOC) cumulative collection for the nine-month period exhibited a 3.4 percent growth, reaching PHP 660.4 billion, which was higher than