FINANCE Secretary Ralph G. Recto said the budget surplus recorded in January is unlikely to continue in the following months.
Asked if the surplus will be sustained in the runup to the elections, Mr. Recto told BusinessWorld: “No. Our deficit target this year is 5.3% of the GDP (gross domestic product).”
The government in January posted a P68.4-billion budget surplus, down from the P88-billion surplus a year earlier, the Bureau of the Treasury (BTr) reported on Tuesday.
The target deficit-to-GDP ratio is lower than the 5.7% target last year, and the government aims to further reduce this to 3.7% in 2028.
The midterm elections for national and local positions are scheduled for May 12.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort noted that the January surpluses of recent years typically follow “large deficits” in December.
The surplus will likely revert to a deficit in the following months.
The BTr also reported that revenue collection in January grew 10.75% to P467.1 billion, while government expenditure rose 19.45% to P398.8 billion.
Mr. Recto told reporters on Wednesday that the government is on track with fiscal consolidation efforts.
“We’re on the path. We surpassed our revenue targets. Last year, we had the highest revenue-to-GDP ratio in the last 27 years. That’s very good.”
Mr. Recto added that the Department of Finance will continue with its privatization efforts.
“We will be happy if we hit our target,” Mr. Recto said on Thursday via Viber when asked if the government will meet its P210.8-billion non-tax collection goal for 2025.
Non-tax revenue fell 19.16% to P29.6 billion, while tax collections rose 13.6% to P437.5 billion in January.
Mr. Recto said the proposed Excise Tax on Single-Use Plastics is still a priority.
The plastics tax is one of the priority bills in the Legislative-Executive Development Advisory Council common legislative agenda for the 19th Congress.
Mr. Recto also said higher spending during the elections will help the government meet its growth target of at least 6%.
This is the lower end of the government’s 6-8% target band for 2025, with the deficit projected at P1.534 trillion or 5.3% of GDP. — Aubrey Rose A. Inosante