Manila: The national government's budget deficit narrowed slightly in the first five months of 2026, driven by sustained growth in revenue collections, according to the Bureau of the Treasury (BTr).

According to Philippines News Agency, in its cash operations report released Thursday, the BTr said the budget gap eased to PHP522.5 billion from January to May, compared to PHP523.9 billion in the same period last year. Government revenues increased by 6.17 percent to PHP2.07 trillion from PHP1.95 trillion a year earlier. Of the total collections, 88.84 percent, or PHP1.84 trillion, came from taxes, while 11.16 percent, or PHP231.4 billion, was generated from non-tax sources.

The Bureau of Internal Revenue (BIR) collected PHP1.42 trillion during the period, up 4.94 percent from PHP1.35 trillion in the first five months of 2025. "This improvement was largely supported by higher collections from personal income tax, other domestic taxes and value-added tax," the BTr said. Collections by the Bureau of Customs (BOC) also increased to PHP405.7 billion from PHP381.7 billion a year ago. Meanwhile, non-tax revenues climbed 15.17 percent year-on-year to PHP231.4 billion.

Government expenditures reached PHP2.60 trillion, up from PHP2.48 trillion in the January-to-May 2025 period. For May alone, revenues totaled PHP420.7 billion, down 7.2 percent from PHP433.1 billion a year earlier due to lower non-tax collections following the advance remittance of dividends by government-owned and controlled corporations.

BIR collections in May reached PHP279.1 billion, 15.01 percent higher than the PHP242.7 billion posted in the same month last year. The increase was partly attributed to the extension of the tax filing and payment deadline from April 15 to May 15, 2026. "In addition, BIR reforms such as the Taxpayer Portal for the Large Taxpayers Service, Registration Seal Badge and QR-enabled Certificate of Registration for online businesses, Ease of Closing Business reform, and measures to implement the new mining royalty regime under Republic Act No. 12253 also aided in boosting collections," the BTr said.

BOC collections rose 5.71 percent to PHP80 billion in May, supported by enhanced valuation practices and stronger revenue collection measures that offset lower import volumes and the temporary suspension of excise taxes on LPG and kerosene. Non-tax revenues, however, declined to PHP39.4 billion in May due to lower BTr income, largely reflecting the timing of dividend remittances during the year.

Government disbursements increased by 3.80 percent to PHP600.2 billion in May, driven mainly by higher interest payments, National Tax Allotment shares for local government units, the Annual Block Grant for the Bangsamoro Autonomous Region in Muslim Mindanao, releases under the Local Government Support Fund, and direct payments by development partners for foreign-assisted rail and road infrastructure projects.