DOF: Fiscal sustainability is the new standard

A March 5, 2013, press release from the Department of Finance

Revenue sustains double-digit increase; deficit below program

The government sustained its double-digit revenue increase with its total collection at P1.53 trillion or a 12.9% growth compared to last year’s P1.35 trillion.

The full year deficit of 2012 amounted to P242.8 billion or 2.3% of GDP, which is lower than the 2.6% of GDP program of P279.1 billion. Netting out interest payments, the administration operated at a primary surplus of P69.9 billion for 2012. The fiscal deficit for December amounted to P115.7 billion with revenues up by 14.7% and expenditures rising by 14.4%.

Revenue growth sustains momentum

BIR collections grew by 18.7% in December, driving full year growth to 14.5% with full year collections reaching P1.05 Trillion or 99.23% of target.

BOC collections grew by 15.3% in December, driving full year growth to 9.3%.

The government’s revenue effort increased to 14.5%, higher than the 14% recorded in 2011 while tax effort also went up to 12.88% against the previous year’s 12.3% due to increased compliance and stringent tax administration efforts despite no new tax measures.

Expenditure continues to accelerate; Share of interest payment goes down

National Government expenditures grew 14.4% in December, driving full year growth to 14.1% with total expenditures reaching P1.77 trillion.

Interest payments for the year was at P312.8 billion or P4.8 billion lower than program. Interest payments as a percentage of total revenue went down from 24.8% in 2009 to 20.3% in 2012. Interest payments as a percentage of total expenditures also went down from 19.6% in 2009 to 17.6% in 2012.

Commenting on the 2012 performance, Finance Secretary Cesar Purisima said that, “2012 results show the continued progress in our drive to reform public finances. We are committed to making fiscal sustainability the new standard that Filipinos can expect of their government.”

He added that the National Government’s strong fiscal position on the back of increased revenue collections in 2012 created space for key expenditure items such as the additional capitalization for the Bangko Sentral ng Pilipinas, “The P20 billion increase in capitalization should help the BSP in stabilizing the local currency which is critical in maintaining macroeconomic stability.”

“We are working hard to further sustain the gains that have been made on both the revenue and expenditure side,” Purisima added.

Outlining his Department’s plans to sustain this performance, Purisima stated, “To further expand revenue collection in 2013, we are working closely with the Bureau of Internal Revenue to improve collection performance especially from estate or inheritance tax and income taxes from the self-employed and professionals sector, and with the Bureau of Customs to improve compliance in the declaration of import values. We are also undertaking several efforts to improve information sharing between BIR and BOC as well as among other national government agencies to further strengthen our ability to evaluate the correctness of the tax payments of different entities.”

“On the legislative side, with the passage of the Sin Tax Bill in 2012, we will work on reforming the fiscal incentives regime and the fiscal regime on mining this 2013.”