Manila: The government's budget deficit reached PHP1.58 trillion last year, slightly above the PHP1.56 trillion program amid slower revenue growth, the Bureau of the Treasury (BTr) said Tuesday. In its latest cash operations report, the BTr noted that the gap widened from PHP1.51 trillion in 2024 as spending restraint partly offset weaker revenues.
According to Philippines News Agency, total collections rose 0.78 percent to PHP4.45 trillion from PHP4.42 trillion in 2024 but missed the revised PHP4.52 trillion target. The BTr reported that stronger non-tax revenues failed to offset a PHP136.8 billion shortfall in tax collections. Taxes accounted for 91.55 percent, or PHP4.08 trillion, while non-tax revenues reached PHP376.3 billion.
The Bureau of Internal Revenue (BIR) recorded PHP3.11 trillion in collections, marking a 9.06 percent year-on-year increase. "Based on preliminary data, this growth was driven by stronger collections from corporate income tax, personal income tax, value-added tax, documentary stamp tax, and excise tax on tobacco," the BTr said. However, BIR collections fell PHP109.6 billion short of the PHP3.22 trillion target, partly due to a pause in payments for infrastructure contracts amid flood control project investigations and a temporary suspension of audit operations.
Meanwhile, the Bureau of Customs (BOC) collected PHP932.7 billion, up 1.75 percent, on the back of stronger enforcement and monitoring. Despite this gain, BOC collections missed the PHP958.7 billion target due to weaker import volumes, the suspension of rice imports, and lower global oil and commodity prices.
Expenditures rose 1.77 percent to PHP6.03 trillion from PHP5.93 trillion in 2024, but were 0.85 percent below the PHP6.08 trillion program. Higher National Tax Allotment releases to local governments, interest payments, and personnel services - due to the second tranche of salary adjustments - drove spending, offsetting lower subsidies to government corporations and other outlays. "The lower-than-program level disbursements, meanwhile, resulted from proactive fiscal management, including stricter oversight on infrastructure projects linked to corruption scandals," the BTr said.
