Budget surplus unlikely to last – Recto

March 21, 2024 | 12:00am

MANILA, Philippines — The record budget surplus in January is unlikely to be sustained over the coming months, more so for the rest of the year, but the government is not worried so long as revenue targets are achieved, according to Finance Secretary Ralph Recto.

The finance chief said the country’s cash operations may not be in a surplus for a long time. “I don’t expect a surplus by the end of the year. I’m just being cautious,” he said.

The government posted a higher budget surplus of P88 billion in January, nearly double the P45.7 billion recorded in the same period last year.

The January surplus was also the highest recorded since the Treasury started keeping track of cash operations data of the government in 1986.

A budget surplus means that the government earned more than what it spent during a given time. The extra money can either be used to pay off debts or be invested in other programs.

“I hope that (revenues) hold all the way up to the end of the year,” Recto said.

“For as long as we hit our revenue and expenditure targets, I’m happy with that,” he said.

Total revenue collection in January jumped by 21 percent to P421.8 billion while expenditures only rose  by 10 percent to P333.9 billion.

For 2024, the government intends to collect P4.235 trillion in revenues. Disbursements, on the other hand, are projected to reach P5.63 trillion.

This would result in a deficit of P1.39 trillion or about 5.1 percent of gross domestic product.

An economist earlier cautioned the government in maintaining a high surplus as this could impact  growth.

Meanwhile, Recto maintained that the DOF remains confident in the passage of its proposed priority tax measures.

In its fourth meeting, the Legislative-Executive Development Advisory Council recently listed 20 priority measures targeted for approval by June.

However, only the value-added tax on digital service providers, military and uniformed personnel pension reform and the Corporate Recovery and Tax Incentives for Enterprises Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) bill were included.

The imposition of excise tax on single-use plastics, Passive Income Financial Intermediary Taxation Bill, rationalization of the mining fiscal regime and the reform on the motor vehicle users’ charge were not part of the 20 measures approved by LEDAC.

“They’re still a priority. Those are all priority measures,” Recto said.

“We discussed the bills. I think they’re also immediate (for passage) up to the end of the year,” he said.