Philippines Budget Deficit Narrows Slightly in February

The Philippines posted a budget deficit of PHP 171.2 billion in February 2026, slightly narrowing from the PHP 171.4 billion shortfall recorded in the same month a year ago. Total revenues surged 43.52% year-on-year to PHP 361.3 billion, driven by a sharp increase in non-tax revenues, reflecting the earlier-than-usual remittance of 2025-earned dividends. Total expenditures climbed 25.83% to PHP 532.5 billion, largely due to the spillover of January’s National Tax Allotment (NTA) and Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) block grant releases into early February, as well as releases for the Special Shares of LGUs in the Proceeds of National Taxes – Tobacco Excise Tax. For the January–February period, the budget deficit shrank to PHP 5.8 billion, a significant decline of 94.35% from PHP 103.1 billion in the corresponding period last year.

The Philippines’ government budget surplus widened sharply to PHP 165.4 billion in January 2026 from PHP 68.4 billion in the same month a year earlier. Government revenues edged up 0.4% year-on-year to PHP 468.9 billion, driven by a 1.21% increase in tax collections to PHP 442.8 billion, which accounted for 94.5% of total revenues. In contrast, non-tax revenues declined by 12.08% to PHP 26.0 billion. Meanwhile, government expenditures fell sharply by 23.9% to PHP 303.5 billion, mainly due to the rescheduling of transfers to local government units and the base effect of elevated capital outlays in January last year. Primary expenditures dropped by 40.3% to PHP 175.7 billion, while interest payments rose by 22.4% to PHP 127.8 billion, reflecting higher debt servicing costs and changes in payment timing. Excluding interest payments, the national government’s primary surplus surged to PHP 293.2 billion, up from PHP 172.8 billion in January 2025.

The Philippines government's budget deficit narrowed to PHP 313.2 billion in December 2025 from PHP 329.5 billion in the same month a year earlier. Government revenues declined 3.3% year-on-year to PHP 304.3 billion, while expenditures fell at a faster pace of 4.2% to PHP 617.4 billion. Stronger tax collections from the Bureau of Internal Revenue (+11.1%) and the Bureau of Customs (+9.8%) supported to limit the shortfall, although non-tax revenues plunged 59.3% to PHP 25.7 billion. For the full year 2025, the fiscal deficit widened 4.7% to PHP 1,576.8 billion from PHP 1,506.4 billion in 2024. Total revenues inched up 0.8% to PHP 4.5 trillion, driven by a 7.3% rise in tax receipts, while expenditures also increased 1.8% to PHP 6 trillion, driven by higher spending on LGU allocations, interest payments, and civilian salary adjustments that offset cuts to GOCC subsidies. For the full year 2025, the total primary deficit eased to PHP 712.7 billion, down from PHP 743 billion last year.