Budget gap widens to P198.5 billion in May

MANILA, Philippines —  The government swung back to a budget deficit in May as revenues declined amid the early remittance of dividends by state-owned agencies, while spending increased, the Bureau of the Treasury (BTr) said.

Data from the Treasury showed that the fiscal gap widened by 36.7 percent to P198.5 billion in May from P145.2 billion in the same month in 2025. This reversed the P31.44-billion surplus recorded in April.

A budget deficit means the government is spending beyond what it earned from revenue collections.

State revenues fell by 7.2 percent to P401.7 billion from P433.1 billion in May 2025.

“The decline was largely attributable to lower non-tax collections, following the advance remittance of government-owned-and-controlled corporation dividends in the preceding months, which shifted receipts away from their customary May schedule,” the BTr also said.

Non-tax collections plunged by 64.2 percent to P39.4 billion in May from P110.2 billion a year earlier, with Treasury income down by 60 percent to P33.2 billion.

“Base effects from one-off receipts booked in May 2025, including remittances from Bases Conversion and Development Authority disposition proceeds, also weighed on the year-on-year comparison,” it said.

Other offices recorded a 77.1 percent decline in revenues to P6.2 billion.

On the other hand, tax revenues, which accounted for 90 percent of total collections, rose by 12.2 percent to P362.3 billion.

The Bureau of Internal Revenue collected P279.1 billion in May, up by 15 percent, partly supported by the one-month extension of the annual income tax filing deadline to May 15.

“BIR reforms such as the Taxpayer Portal for the Large Taxpayers Service, Registration Seal Badge and QR-enabled Certificate of Registration for online businesses, Ease of Closing Business reform and measures to implement the new mining royalty regime under Republic Act 12253 also aided in boosting collections,” the Treasury said.

Likewise, the Bureau of Customs’ revenues rose by 5.7 percent despite weaker import volumes and the suspension of excise taxes on Liquefied Petroleum Gas and kerosene. This was aided by tighter valuation practices and strengthened revenue collection measures.