MANILA -- National Government (NG) revenues rose by 19.0 percent in the first five months of 2018 as the first phase of TRAIN took effect and tax administration improvements were enhanced, almost doubling nominal GDP growth which registered 9.7 percent during the first quarter, the Department of Finance (DOF) reported in its latest economic bulletin.
Tax revenues grew by 18.4 percent, with BIR collections rising by 15.5 percent and BOC collections rising by 31.2 percent, also exceeding the 9.7 percent nominal GDP growth.
Non-tax revenues rose by only 25.2 percent due to higher fees and charges, income from dividends, interest income and privatization proceeds.
Expenditures grew by 25.0 percent, also outstripping the 9.7 percent nominal GDP growth due to the estimated 40.0 percent increase in capital outlays.
Revenue effort rose by 1.43 percentage points. Tax effort also went up by an unprecedented 1.19 percentage points, from 15.14 percent to 16.33 percent, the highest first five months’ tax effort ever achieved.
Expenditure effort rose by 2.48 percentage point to 20.3 percent, the highest first five months’ expenditure effort since 2003, thus boosting its contribution to GDP growth.
The NG deficit settled at 2.1 percent of GDP, below the 3 percent target at the end of the year.
The finance department said fiscal space expanded by TRAIN 1 and tax administration enabled government to boost investments and growth. Public construction expanded 25.1 percent in Q1, boosting GDP growth by 0.4 percentage point while government consumption rose 13.6 percent, contributing incremental 1.4 percentage points to growth.
The DOF concluded its bulletin by saying, that strong macroeconomic fundamentals backed by tax reforms and the ‘Build, Build, Build’ program will continue to boost economic growth closer to the optimum 7-8 percent level as the competitiveness of the economy rises and more jobs are created. (DOF PR)
