The national government’s budget deficit narrowed to only P1.614 trillion in 2022, down three percent from P1.67 trillion a year earlier, according to the Bureau of the Treasury.
However, the financing gap stood above the inter-agency Development and Budget Coordination Committee’s (DBCC) program of only P1.502 trillion.
Based on the Treasury report, the deficit was driven by larger national tax allotment to local government units (LGU) in line with the first-year implementation of the Mandanas Ruling, which widened the tax base from which the revenue allotment of each LGU is computed.
Total expenditures amounted to P5.159 trillion last year, three percent higher than the DBCC target of P5.018 trillion. Year-on-year, it grew 10 percent from P4.675 trillion.
The Treasury also said higher capital expenditures for road and transport infrastructure as well as defense modernization projects boosted the disbursement of public funds.
Personnel services expenses also rose in 2022 owing to the implementation of the third tranche of the Salary Standardization Law, the release of other personnel benefits as well as interest payments, the bureau noted.
Last year, the budget deficit in relation to gross domestic product settled at 7.33 percent, or above the 6.9 percent target set by the DBCC.
Meanwhile, revenues rose 19 percent to P3.545 trillion from P3.005 trillion in 2021, which also surpassed the DBCC goal of P3.516 trillion.
Ninety-one percent or P3.2 trillion of the total was derived from tax revenues, while non-tax collections comprised the balance of nine percent.
In 2022, the Bureau of Internal Revenue managed to improve its overall collection by 12 percent to P2.3 trillion. However, the full-year tax haul was still behind the P2.4 trillion target.
On the other hand, collections by the Bureau of Customs climbed to P862.4 billion, outperforming the P643.6 billion raised a year earlier and 19 percent above the P721.5 billion target.
“Customs’ robust revenue performance was supported by efforts to ensure the recovery of deficient duties and taxes, improve tax compliance, tariffs on rice imports, and public auctions of overstaying cargo,” the Treasury said.
Revenue effort for 2022 improved to 16.1 percent from 15.48 percent. Tax effort also grew to 14.62 percent from 14.13 percent a year ago.
Netting out the interest payments, the government recorded a primary deficit of P1.111 trillion last year, lower by 10 percent than the P1.24 trillion record in 2021.
In December alone, the national government incurred a P378.4 billion fiscal deficit, up 12 percent compared with P338 billion in the same month a year earlier.
Revenue during the month amounted to P268.2 billion, while expenditures stood at P646.6 billion.
