The government said its budget deficit narrowed 17.01 percent in May due to strong revenue gains and restrained spending during the midterm election season.
The broader fiscal picture shows swelling year-to-date shortfalls, fueled by rising public investment and a narrowing space for maneuver.
Data released by the Bureau of the Treasury (BTr) on Thursday showed the national government’s budget deficit narrowed to P145.2 billion in May, down from P174.9 billion a year earlier.
Two key factors were at play: a 13.35 percent surge in revenues and muted expenditure growth, tempered by the ban on election-related spending ahead of the May 12 midterm polls.
Revenues for the month reached P433.1 billion, boosted by double-digit growth in both tax and non-tax income. The Bureau of Internal Revenue (BIR) led the charge, collecting P242.7 billion, up 10.71 percent year-on-year, largely on the back of corporate and personal income taxes, tobacco excise levies and taxes on government securities.
The BIR’s year-to-date haul climbed to P1.354 trillion, reflecting a 13.8 percent gain from last year — a testament to intensified audits, a broader digital push, and an aggressive clampdown on fake transactions and illicit tobacco trade.
The Bureau of Customs (BOC), however, posted a dip in monthly collections, taking in ₱75.7 billion, nearly 7 percent lower than last year. The decline was attributed to lower tariff collections, particularly from rice imports and electric vehicles, which benefited from recent rate cuts. Still, the BOC’s January–May tally inched up 0.22 percent to P381.7 billion.
Adding to the revenue surge was the BTr’s own income, which quadrupled in May to P83 billion, powered by dividend remittances from state-run firms and higher shares from gaming and investment earnings. But the five-month total of P129.2 billion lagged behind last year by 17.44 percent, due to the absence of extraordinary inflows, such as 2024’s Casecnan privatization windfall.
Despite the strong showing in May, the broader fiscal ledger points to mounting pressure.
From January to May, the budget deficit widened by 29.41 percent to P523.9 billion, from P404.8 billion in the same period last year. The driver: a sustained ramp-up in government disbursements, particularly for infrastructure and social services aimed at boosting inclusive growth.
Expenditures rose modestly in May — just 3.81 percent to P578.2 billion — but cumulatively reached P2.477 trillion, nearly 10 percent higher than last year. The increase reflected rising interest payments, tax allotments to local government units, the annual block grant to the Bangsamoro region, and the second tranche of salary adjustments for government workers.
The Treasury bureau, however, remained confident. “The national government remains on track to meet its deficit target for the year through prudent fiscal management and efficient use of resources,” it said, reiterating its alignment with the Medium-Term Fiscal Framework.
