Philippines fiscal targets on track

The government remains on course to meet its fiscal goals this year, with both revenues and expenditures registering strong double-digit growth in the first two months of 2025, according to the Bureau of the Treasury (BTr).

In its latest cash operations report released Wednesday, the BTr reported a budget deficit of P103 billion as of end-February, higher than the P76.7 billion recorded in the same period last year. Despite the wider gap, the increase came alongside improved revenue performance and elevated government spending.

Total revenue collections reached P718.9 billion from January to February, reflecting an 11.32 percent increase from P645.8 billion a year ago. The bulk came from taxes, which rose 12.64 percent to P671.9 billion.

The Bureau of Internal Revenue (BIR) contributed the largest share, collecting P514.7 billion — a 15.31 percent increase from P446.4 billion in 2024. This growth was attributed to higher collections from value-added tax, corporate and personal income taxes, final withholding tax on government securities, and documentary stamp tax.

“The BIR’s continued progress in revenue performance is credited to its ongoing improvements in tax payment systems and collection efficiency,” said the BTr.

The Bureau of Customs (BOC) also posted improved figures, generating P151 billion in revenues, up from P144 billion during the same period last year.

“The YoY growth in BOC collections for the first two months mirrored the 4.93 percent growth in goods imports for the same period. BOCs’ continuous modernization, border protection, and capacity development efforts have enabled the bureau to maintain its positive performance in the first two months of the year,” the report noted.

Meanwhile, non-tax revenues declined slightly to P47 billion from P49.3 billion in 2024, largely due to lower Malampaya proceeds.

On the expenditure side, government disbursements climbed 13.76 percent to P822 billion in the first two months of 2025, compared to P722.5 billion in the same period last year.

February alone saw a significant uptick in spending, with disbursements reaching P423.2 billion — more than 8 percent higher year-on-year. The increase was driven by the Department of Public Works and Highways’ accelerated capital spending, particularly for progress billings and right-of-way payments tied to ongoing infrastructure projects.

Additional spending by the Department of Health and the Department of Social Welfare and Development for flagship health and social protection programs also contributed to the surge.

Primary expenditures rose 11.43 percent to P669.1 billion from P600.5 billion a year ago, while interest payments jumped by 25.26 percent to P152.9 billion.