Bigger state spending on less taxes inflated the government’s budget deficit to P765.5 billion in the first six months of the year, exceeding the first-half program by P4.8 billion or 0.63 percent, based on the latest treasury data.
This was “despite accelerated and higher public spending to support economic growth,” the Bureau of the Treasury (BTr) said on Thursday.
The January to June budget gap was higher by P151.6 billion or 24.69 percent than the P613.9 billion recorded in the same period in 2024.
In June alone, the shortfall was at P241.6 billion, up by P32.5 billion or 15.56 percent versus P209.1 billion in June 2024.
H1 collections
The government said it collected P2.260 trillion in total revenues in the first six months, rising by P110.7 billion or 5.15 percent from the previous year’s P2.149 trillion.
The first-half disbursements, meanwhile, reached P3.025 trillion, which was P262.3 billion or 9.49 percent higher than the level at end-June 2024 of P2.763 trillion. Expenditures were kept within the P3.041 trillion ceiling for the period, the BTr said.
For the month of June alone, total revenues stood at P306.9 billion, up by P10.4 billion or 3.5 percent more than the P296.5 billion recorded a year earlier. The June tax collections offset the base effect of the one-off remittances under non-tax revenues in 2024, the BTr said.
Expenditures during the month continued to exceed revenues, with the government allotting P548.5 billion as expenses in June, surpassing the year-earlier P505.6 billion by P42.9 billion, or 8.49 percent.
The BTr said this was driven by the higher National Tax Allotment shares of local government units, the Annual Block Grant to the BARMM, personnel services and interest payments.
Double-digit tax revenue growth
The BTr said the government’s fiscal performance “remained broadly on track due to sustained double-digit growth of tax revenues.”
Revenue from tax is the bulk of all collected taxes at 89.93 percent of the total as of end-June this year, which at P2.032 trillion reflects a 10.47 percent or P197.2 billion increase.
The remaining 10.07 percent amounting to P227.7 billion comprised non-tax revenues. This amount is P86.5 billion lower or 27.53 percent down from the previous year’s P314.2 billion.
For the January to June period, the Bureau of Internal Revenue (BIR) collected P1.554 trillion, which was P192.1 billion or 14.11 percent higher than the year-earlier figure of P1.362 trillion.
The BTr said BIR collections were boosted by corporate income tax (CIT), value-added tax (VAT), and personal income tax (PIT).
“Additional sources of higher revenue came from increased excise tax collections on tobacco, including electronic cigarettes, through the bureau’s continued efforts to intensify the crackdown on the illicit tobacco trade and the strict implementation of the mandatory excise tax stamps on vapor products,” the BTr added.
The Bureau of Customs (BOC) contributed P458.8 billion, up by P3.3 billion or 0.71 percent from P455.5 billion in January to June 2024.
For the month of June alone, tax revenues totaled P306.9 billion, up by P10.4 billion or 3.5 percent from P296.5 billion a year earlier.
The BIR in June collected P200.5 billion, while the BOC reported P77 billion, up by P28 billion (16.24 percent) and P2.4 billion (3.23 percent), respectively.
Primary expenditures
About 89.53 percent or P491.1 billion of expenditures in the first six months were primary expenditures. The amount is higher by P41.1 billion or 9.14 percent than the year-earlier level.
This brought the first-half primary expenditures to P2.611 trillion, up by P224.7 billion or 9.41 percent, but still P13.4 billion or 0.51 percent short of the P2.624 trillion program for the period, the BTr said.
The government’s interest payments reached P414.8 billion as of end-June, which was P37.6 billion or 9.97 percent higher year-on-year from P377.2 billion.
As of end-June, the BTr also reported a primary deficit of P350.7 billion, up by P114 billion or 48.16 percent compared with P236.7 billion in the corresponding 2024 period.
