Philippines Budget Deficit Widens in May

The Philippines’ budget deficit widened to PHP 198.5 billion in May 2026 from PHP 145.2 billion in the corresponding month of the previous year. Government revenues fell 7.2% year-on-year to PHP 401.7 billion, largely due to lower dividend remittances from government-owned and controlled corporations (GOCC) following the early transfer of dividends in previous months. Meanwhile, expenditures rose 3.8% year-on-year to PHP 600.2 billion in May 2026, driven by higher interest payments on debt, larger transfers to local government units, funding for the Bangsamoro region and local government support programs, as well as disbursements for foreign-assisted rail and road infrastructure projects. For January–May, the cumulative budget deficit narrowed slightly to PHP 522.5 billion from PHP 523.9 billion a year ago.

The Philippines’ budget surplus narrowed to PHP 31.4 billion in April 2026 from PHP 67.3 billion in the same month a year earlier. Total expenditures jumped 11.14% to PHP 505.4 billion, driven by higher National Tax Allotment shares for LGUs, as well as the Annual Block Grant for the BARMM and the Local Government Support Fund. Spending was also supported by increased budgetary assistance to GOCCs and the return of PHP 60.0 billion in excess funds from PhilHealth. Meanwhile, total revenues rose 2.83% year-on-year to PHP 536.8 billion, driven by a 2.62% increase in tax collections and a 7.32% rise in non-tax revenues. For the January–April period, the budget deficit narrowed to PHP 324.1 billion, down 14.44% from PHP 378.7 billion in the same period last year.

The Philippines’ budget deficit widened to PHP 349.7 billion in March 2026 from PHP 342.9 billion in the corresponding month of the previous year. This marked the largest deficit since a record high in December 2023. Total revenues rose 9.25% year-on-year to PHP 305.1 billion, driven by a 6.51% increase in tax collections and a 45.54% surge in non-tax revenues. Total expenditures increased 5.23% to PHP 654.8 billion, led by higher National Tax Allotment shares of LGUs, as well as releases for their Special Shares in the Proceeds of National Taxes – Tobacco Excise tax and the Local Government Support Fund. Spending was also buoyed by higher budgetary assistance to GOCCs and PHP 20.0 billion in releases to the DOE for the government’s Emergency Energy Program, aimed at boosting fuel supply amid Middle East tensions. For the first quarter of the year, the country recorded a budget shortfall of PHP 355.5 billion, narrowing from PHP 446.0 billion in the same period last year.