Budget deficit widens to P350 billion

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April 25, 2026 | 12:00am

MANILA, Philippines — The Philippines’ budget deficit widened to P349.7 billion in March as the government ramped up spending to finance its response to the Middle East war amid a national energy emergency, according to the Bureau of the Treasury (BTr).

Data from the Treasury showed that the fiscal gap inched up by two percent in March from P342.9 billion in the same month last year.

A budget deficit means that the government is spending beyond what it earned from revenue collections, although at a slower pace this time around.

The slight increase in the deficit last March “reflects a higher year-on-year increase in expenditures of P32.6 billion, which outpaced the P25.8 billion rise in revenues,” the BTr said.

The Marcos administration’s expenditures stood at P654.8 billion in March, up by 5.2 percent from P622.2 billion in the previous year.

The Treasury explained that spending for the month was primarily driven by higher national tax allotment shares for local government units, as well as the releases of their special shares from the proceeds of national taxes – tobacco excise tax and the local government support fund.

”Spending in March was also buoyed by the increased budgetary support to GOCCs, as well as the P20 billion releases to the Department of Energy for the implementation of the government’s Emergency Energy Program to help augment the country’s fuel supply amid the Middle East conflict,” it said.

The government has identified P236.6 billion in funds to address the fuel shock that has increased the living costs.

Primary expenditures at P558.4 billion, which accounted for 85.3 percent of total spending, also increased by 4.6 percent.

The government also increased its interest payments by 9.4 percent to P96.4 billion from P88.1 billion a year ago.

For the first quarter, the deficit narrowed by 20.3 percent to P355.5 billion from P446 billion in the comparative quarter in 2025.

Total disbursements rose by 3.2 percent to P1.49 trillion from January to March.

On the other hand, data showed that total revenue collection in March improved by 9.2 percent to P305.1 billion as against the P279.3 billion in the same month last year, as both tax and non-tax revenues increased.

Bulk or 85.4 percent of the revenues were from tax collections at P276.5 billion, inching up by 6.5 percent.

The Bureau of Internal Revenue (BIR)’s haul improved by 6.6 percent to P187.3 billion while the Bureau of Customs (BOC) posted a 5.5 percent decline in collection to P84.8 billion.

The BIR’s higher three-month take was due to intensified tax administration, digital transformation and aggressive efforts to curb revenue leakages.

Meanwhile, the BOC’s increase in collections was attributed to the agency’s Integrity, Accountability and Modernization (IAM) Program, which streamlines the bureau’s operations and enhances transparency.

”By strategically auctioning forfeited luxury assets and enforcing strict compliance through intensified post-clearance audits, the IAM Program effectively maximized collections for Q1,” it added.

Non-tax collections soared by 45.5 percent to P28.5 billion in March, driven by early remittance of dividends remittances from state-owned corporations.

Income generated by the Treasury more than doubled to P20.9 billion.

Year-to-date, cumulative revenue collections picked up by 13.7 percent to reach P1.14 trillion.

This year, the economic team aims to bring the budget deficit to P1.61 trillion and cut the deficit-to-gross domestic product ratio to 5.3 percent.