July gap narrows as revenue outpaces spending
The Philippines posted a budget deficit of P784.4 billion in the first seven months of 2025, widening 22.04 percent from P642.8 billion a year earlier, Treasury data showed on Thursday.
For July alone, the shortfall narrowed to P18.9 billion from P28.8 billion in the same month last year, with revenues up 3.26 percent on higher corporate income tax collections and spending up just 1 percent.
Based on Bureau of the Treasury (BTr) data, total revenue in July rose by P14.9 billion to P472.3 billion from P457.4 billion a year earlier. Government spending reached P491.2 billion, or P5 billion more than the year-earlier P486.2 billion.
Of the total revenue, tax collections accounted for P423 billion, 5.01 percent or P20.2 billion higher than the comparative period’s P402.8 billion.
The Bureau of Internal Revenue (BIR) generated P335.3 billion in July, up 4.83 percent or P15.4 billion from P319.8 billion, while the Bureau of Customs (BOC) contributed P85.2 billion, an increase of 6 percent or P4.8 billion from P80.4 billion.
Higher corporate income taxes
The BTr said higher corporate income taxes boosted collections, alongside gains from personal income tax, tax on government securities, excise tax on tobacco products, percentage tax on banks and financial institutions, and documentary stamp tax.
Non-tax revenues slipped 9.66 percent to P49.3 billion from P54.6 billion last year.
In July, expenditures totaled P491.2 billion, driven by a 33.72 percent jump in interest payments to P106.2 billion. Other expenses declined 5.36 percent or P21.8 billion to P385 billion.
Government disbursements were supported by higher National Tax Allotment releases to local government units, the Annual Block Grant to the Bangsamoro Autonomous Region in Muslim Mindanao, interest payments, and personnel services. However, spending was tempered by the timing of major outlays from the Department of Public Works and Highways, Department of Social Welfare and Development, and Department of National Defense.
Faster 7-month expenditures
From January to July, total revenues reached P2.731 trillion, up 4.82 percent or P125.6 billion from P2.606 trillion last year.
Expenditures rose at a faster 8.22 percent to P3.516 trillion, up by P267.2 billion from P3.249 trillion a year earlier.
Of total revenues, tax collections hit P2.455 trillion, 9.71 percent or P217.3 billion higher than the P2.238 trillion posted last year.
The BIR accounted for P1.889 trillion of collections, up 12.34 percent or P207.6 billion from P1.681 trillion, while the BOC added P544 billion, an increase of 1.51 percent or P8.1 billion from P535.9 billion.
Non-tax revenues, meanwhile, plunged 24.88 percent or P91.8 billion to P277 billion from P368.8 billion a year earlier.
End-July expenditures were lifted by higher interest payments, which climbed 14.10 percent to P521 billion from P456.7 billion in 2024.
On track to cap fiscal gap
Given a cumulative deficit of P784.4 billion, the government said it remains on track to cap the 2025 fiscal gap at P1.56 trillion.
“This performance underscores the government’s commitment to support economic development while keeping within the bounds of prudent fiscal management,” the BTr said.
The primary deficit for January to July surged 41.53 percent to P263.4 billion from P186.1 billion in 2024.
For July alone, however, stronger revenues resulted in a primary surplus of P87.3 billion, up 72.58 percent from P50.6 billion a year earlier.
