Budget surplus climbs to P165.4 billion in January

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March 21, 2026 | 12:00am

MANILA, Philippines — The Marcos administration’s fiscal position swung to a record P165.4-billion surplus in January, amid a sharp decline in government expenditure, according to the Bureau of the Treasury.

Latest data from the BTr showed that the budget surplus at the start of the year was a turnaround from the P313.17-billion deficit in December.

This was also more than double the P68.4-billion surfeit booked in January 2025. It was also the first surplus since the P90.54-billion excess in October.

A budget surplus occurs when revenue collections exceed government expenditures, meaning the state generated more money for the period than it spent.

Economists largely attributed the surplus to seasonal factors and a timing quirk in early-year revenues.

“January’s budget surplus is a good headline, but it’s mostly driven by timing – strong early revenues and slower spending – rather than a sign of deep structural strength,” Jonathan Ravelas, senior adviser at Reyes Tacandong & Co., said.

John Paolo Rivera, senior research fellow at the Philippine Institute for Development Studies, noted that it is common to see faster early-year revenue collections and typically slower disbursements that drive the surplus.

“It does not yet indicate structural fiscal strength, especially since spending usually accelerates in the succeeding months,” he said.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said the surplus could have stemmed from weaker state spending, pointing to persistent underspending since late 2025 after corruption-linked flood-control projects.

Data showed that government expenditures plunged by 23.9 percent to P303.5 billion in January against the P398.8 billion in the same month last year, largely due to the rescheduling of the transfers to local government units.

The BTr attributed the lower spending to the base effect of large capital disbursements in January 2025 due to the settlement of accounts payables and frontloading of some expenditures ahead of the election ban.

Primary expenditures, which accounted for 57.9 percent of the total spending, fell by 40.3 percent to P175.7 billion in January from P294.4 billion in the same month in 2025.

The government jacked up its interest payments by 22.4 percent to P127.8 billion from P104.4 billion a year ago.

This was driven by “additional debt incurred to finance the previous year’s deficit and changes in coupon payment timing following refinancing,” according to the BTr.

Meanwhile, total revenue collection in January inched up to P468.9 billion from P467.1 billion a year ago.

The bulk, or 94.5 percent, of the revenues came from tax collections, totaling P442.8 billion, rising by 1.2 percent.

The Bureau of Internal Revenue’s haul grew by 1.01 percent to P358.7 billion, backed by digitalization initiatives and intensified tax administration efforts.

The Bureau of Customs saw its collection increase by 2.1 percent to P80.9 billion in January from P79.3 billion year-on-year.

“The agency’s positive outturn was buoyed by its sustained enforcement operations, including the seizure of smuggled goods, the confiscation of illegally imported vehicles and strengthened compliance and tax administration measures,” the Treasury said.

Non-tax collections, however, declined by 12.1 percent to P26 billion in January, primarily due to reduced collections amid softer income and the national government’s share from Malampaya proceeds.

Income generated by the Treasury fell by 13.2 percent to P13.7 billion, while collections from other offices, including privatization proceeds and fees and charges, also slipped by 10.9 percent to P12.4 billion.

Analysts flagged the Middle East crisis as a key risk that could push up subsidies, operations costs, inflation and deficits.

”The surplus is more about timing than a structural shift, while it’s a good start, rising oil prices could put pressure on both spending and revenues moving forward,” Rivera said.

Ricafort added that the government’s catch-up spending in late 2025 could lead to wider budget deficits later this year.

For 2026, the government has set a deficit ceiling of P1.61 trillion, equivalent to 5.3 percent of the country’s gross domestic product.