Budget swings back to deficit in February

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April 8, 2026 | 12:00am

MANILA, Philippines — The government reverted to a budget deficit in February after a brief surplus at the start of 2026, despite a 44 percent increase in state revenues, the Bureau of Treasury said.

Latest data from the BTr showed that the government swung back to a budget deficit of P171.2 billion in February from a brief surplus of P165.4 billion in January.

Despite this, the government’s fiscal gap narrowed by 0.14 percent from P171.4 billion in February 2025, which the BTr attributed to early remittance of dividends that pushed revenue growth and helped offset expenditure.

“Our strong fiscal performance in February sets us up for a stable first quarter of this year. This acts as our safety net, giving us the resources to support the economy, especially during this time of uncertainty,” Finance Secretary Frederick Go said in a separate statement.

Go added that the fiscal buffer enables the government to deliver “timely, targeted and managed subsidies” to those most affected by the Middle East conflict.

“This performance by the Department of Finance and its attached agencies allows the government to maintain fiscal discipline and ensure a sustainable path in managing the current crisis,” he said.

A budget deficit means that the government is spending beyond what it earned, at a significantly faster pace this time around.

BTr data showed that total revenue collection in February soared by 43.5 percent to P361.3 billion from P251.8 billion in the same period last year, with the surging non-tax collections.

The bulk or 69 percent of the revenues were from tax collections amounting to P249.8 billion, up by 6.6 percent.

The Bureau of Internal Revenue (BIR)’s collection picked up by 8.5 percent to P249.8 billion, while the Bureau of Customs (BOC)’s revenue stood at P73.7 billion, up by 2.7 percent.

“Apart from the BOC’s strengthened enforcement and compliance measures, the uptick in the Bureau’s collection can also be attributed to the peso’s year-over-year depreciation,” the BTr said.

The US dollar rose by 0.3 percent to P58.3 in February 2026 from P58.1 a year earlier, raising the cost of imports and boosting total collections, the Treasury added.

On the other hand, non-tax collections grew more than six times or 540.23 percent to P111.5 billion in February, reflecting the earlier-than-usual remittance of 2025-earned dividends remitted to the BTr.

Income generated by the BTr grew by 1,104 percent to P95.4 billion in February from P7.9 billion last year.

Collection from other offices including privatization proceeds and fees and charges for the month also surged by 70 percent to P16.2 billion.

On the other hand, government spending in February also surged by 25.8 percent to P532 billion from P423.2 billion in the same period last year.

This was primarily attributed to the spillover of January National Tax Allotment and Bangsamoro Autonomous Region in Muslim Mindanao block grant release to early February, as well as releases for the Special Shares of local government units in the proceeds of national taxes – tobacco excise tax.

Primary expenditures rose by 29 percent to P483.6 billion while interest payments inched up by one percent to P48.9 billion.

As for the January to February period, the budget deficit narrowed by 94.4 percent to P5.8 billion from P103.1 billion in the same period in 2025, amid faster revenue collections.

For the first two months, cumulative revenue collections picked up by 15.5 percent to reach P830.2 billion from P718.9 billion, as non-tax revenues nearly tripled to P137.6 billion.

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.