Philippine budget deficit widens slightly in September

By Justine Irish D. Tabile, Senior Reporter

THE NATIONAL GOVERNMENT’S (NG) budget deficit widened slightly in September despite double-digit revenue growth that outpaced the rise in government spending, the Bureau of the Treasury (BTr) said.

The fiscal gap inched up by 0.33% to P248.9 billion in September from P248.1 billion in the same month a year earlier, Treasury data released on Thursday showed.

“The deficit marginally increased as expenditure grew by P37.3 billion year on year and tapered by a P36.5-billion increase in total revenues,” the BTr said.

Month on month, the deficit ballooned by 54.35% from the P161.3-billion shortfall recorded in August.

Total revenue collections jumped by 12.95% to P318.2 billion in September from P281.7 billion a year earlier, supported by double-digit growth in both tax and nontax revenues.

Tax revenues, which accounted for 93.68% of total collections, increased by 12.11% to P298.1 billion in September from P265.9 billion a year ago.

Collections by the Bureau of Internal Revenue (BIR) rose by 11.18% to P203.4 billion in September from P183 billion in the same month last year.

The Bureau of Customs’ collections went up by 14.76% to P92.1 billion from P80.3 billion a year earlier.

The Treasury attributed the sustained growth in Customs collections to the “peso depreciation and higher oil prices, as well as enforcement measures, improved valuation and assessment, and continued customs modernization.”

Nontax revenues surged by 27.22% to P20.1 billion in September from P15.8 billion a year earlier.

Broken down, BTr income increased by 5.74% to P8.2 billion from P7.8 billion a year ago, while nontax revenues from other offices surged by 47.94% to P11.9 billion from P8 billion.

Meanwhile, government expenditures increased by 7.04% to P567.1 billion in September from P529.8 billion a year earlier amid “continuing implementation of education, health, and social protection services, as well as an uptick in infrastructure expenditures.”

The Treasury also said local government units’ higher share of National Tax Allotments and the Annual Block Grant to the Bangsamoro Autonomous Region in Muslim Mindanao also contributed to the increase in spending.

Primary expenditures, which exclude interest payments, rose by 7.46% to P481.5 billion in September from P448.1 billion a year earlier. These accounted for 84.91% of total disbursements.

Interest payments increased by 4.74% to P85.6 billion in September from P81.7 billion in the same month last year.

Excluding interest payments, the government recorded a primary deficit of P163.3 billion in September, narrowing by 1.84% from the P166.4-billion shortfall a year earlier.

NINE-MONTH GAP
For the January-to-September period, the budget deficit widened by 16.64% to P1.303 trillion from P1.117 trillion in the same period last year, BTr data showed.

The nine-month shortfall exceeded the government’s P1.206-trillion deficit program by 8.08% or P97.4 billion.

This also represented 78.56% of the P1.66-trillion full-year deficit ceiling approved by the Development Budget Coordination Committee in May.

Total revenue collections grew by 4.99% to P3.535 trillion in the nine-month period from P3.367 trillion a year earlier, but 0.95% below the P3.569-trillion revenue target for the nine-month period. This accounted for 73.54% of the P4.807-trillion full-year revenue program.

As of end-September, tax revenues rose by 5.64% to P3.225 trillion, accounting for 91.23% of total collections.

BIR collections increased by 5.12% to P2.442 trillion, although these remained 2.68% below the agency’s nine-month target.

Customs collections climbed by 7.77% to P756.2 billion, exceeding its P748.5-billion target by 1.03%.

Nontax revenues dipped by 1.32% to P309.9 billion as of end-September from P314.1 billion a year earlier, although these exceeded the nine-month program by 10.04%.

Meanwhile, nine-month government expenditures increased by 7.9% to P4.838 trillion from P4.484 trillion a year earlier.

This exceeded the P4.775-trillion spending program for the first nine months by 1.33% and accounted for 74.82% of the revised P6.466-trillion full-year disbursement target.

Primary expenditures rose by 6.49% to P4.066 trillion as of end-September, while interest payments jumped by 15.95% to P772.1 billion.

The nine-month primary deficit widened by 17.67% to P531.2 billion from P451.4 billion a year earlier.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort attributed the country’s fiscal challenges partly to sluggish economic growth following government underspending since late 2025.

In a Viber message, he said catch-up government spending, particularly on infrastructure, could help “pump-prime the economy back to the usual 5% levels,” improve tax collections, narrow the budget deficit, and reduce the debt-to-gross domestic product ratio.

Mr. Ricafort also called for stronger tax collection efforts and fiscal reforms, with new or higher taxes considered only a last resort.

“More disciplined NG spending also needed to narrow the budget deficit and curb the growth in outstanding debt in terms of anti-corruption measures,” he said.

The government set its fiscal deficit ceiling at P1.659 trillion or -5.4% of GDP this year.