Budget in Q1 surplus but FY deficit still looms

Figures from the Ministry show that the surplus in the first quarter of the 2023-24 financial year, a period which covers the months between April and June, was powered largely by Southern African Customs Union (SACU) receipts and mineral revenues.

The P5.2 billion surplus compares with a surplus of just P645.3 million for the first quarter of 2022-23 and a deficit of P1.4 billion for the same period in 2021-22.

According to Finance Ministry data, revenues in the first quarter of the current financial year reached P24.4 billion compared to expenditure of P19.2 billion. Revenues were anchored by taxes of P16.3 billion which were in turn helped by SACU revenues of P6.1 billion and non-mineral income tax of P4.2 billion. On the expenditure side, public service wages were the major item at P7.3 billion in the first quarter, followed by grants and subventions at P3.5 billion.

Government has pledged several reforms to reduce both the public service wage bill and its support to local authorities and parastatals.

Much of this financial year's deficit is expected to come from the stronger spending expected under the Transitional National Development Plan, as well as the anticipated reduction in mineral revenues due to the diamond downturn.