MANILA — The Philippine government’s budget deficit widened sharply in August, reaching ₱161.3 billion, as higher public spending coincided with weaker revenue collections.
The August shortfall was 90.2% higher than the ₱84.8-billion deficit recorded during the same month last year, according to Bureau of the Treasury data.
Government expenditures climbed 16% year-on-year to ₱507.3 billion from ₱437.3 billion. A major factor was ₱58.6 billion in budgetary support for PhilHealth, covering health insurance premiums for beneficiaries enrolled under the National Health Insurance Program. Higher national tax allotments to local governments also contributed to the increase.
Interest payments added further pressure, rising 3.98% to ₱65.6 billion from ₱63.1 billion a year earlier. The increase reflected coupon payments on additional domestic debt securities, partly offset by lower foreign debt payments because of a change in the settlement timing of global bond servicing.
On the revenue side, collections declined 1.85% to ₱346 billion from ₱352.5 billion. Non-tax revenues suffered the biggest drop, falling 35.6% to ₱13.7 billion because of lower Treasury income and collections from other government offices.
Tax collections were comparatively stable, rising 0.3% to ₱332.3 billion. Bureau of Internal Revenue collections slipped 0.7% to ₱248.4 billion, while Bureau of Customs collections increased 4.2% to ₱80.7 billion.
Economists cited by BusinessMirror said weaker revenue collection may reflect softer economic activity affecting income- and consumption-related taxes, although the timing of government receipts can also influence monthly figures.
From January through August, the national government’s cumulative budget deficit reached ₱1.054 trillion, up 21.3% from ₱869.2 billion during the same period last year. Government revenues for the eight-month period totaled ₱3.216 trillion, while expenditures reached ₱4.270 trillion.
Despite the increase, the eight-month deficit remained within the government’s full-year deficit program of ₱1.658 trillion, equivalent to 5.4% of GDP. The January-to-August gap represents roughly 64% of that annual target.
The latest figures highlight the fiscal challenge facing the government: spending is growing faster than revenue in the latest monthly data, while interest costs continue to consume a significant portion of public resources.
The bigger question now is whether stronger economic activity and improved revenue collection can catch up with rising government spending before the fiscal gap puts additional pressure on future budgets.
