Budget deficit bloats to P161.3 billion in August

MANILA, Philippines — The national government’s budget deficit widened by 90.2 percent in August as public  spending surged, driven  by nearly P60 billion in support for the Philippine Health Insurance Corp. (PhilHealth), while revenue collections declined.

Data from the Bureau of the Treasury (BTr) showed that the Marcos administration posted a wider budget shortfall of P161.3 billion in August, up from the P84.8-billion gap in the same month last year.

A budget deficit means the government is spending more than it earns from revenue collections.

The BTr attributed the P76.5-billion widening in the fiscal gap to a double-digit spike in expenditures, mainly from the settlement of PhilHealth arrears, while revenue collections slipped.

Government spending in August rose by 16 percent to P507.3 billion from P437.3 billion in the same period in 2025.
The higher spending was driven largely by  the P58.6-billion in budgetary support to PhilHealth for the health insurance premiums of indigents, senior citizens and point-of-service patients enrolled under the National Health Insurance Program.

The Treasury said higher national tax allotment shares for local governments also contributed to the increase in disbursements.

Primary expenditures of P441.6 billion accounted for 87.1 percent of total spending, up by 18 percent from P374.2 billion.

Interest payments also rose by nearly four percent to P65.6 billion from P63.1 billion a year ago.

“(The increase was) due to coupon servicing on additional domestic debt securities, which offset lower foreign payments caused by the shift in the settlement date of global bond debt servicing,” the BTr said.

On the other hand, total revenue collection in August fell by 1.9 percent to P346 billion from P352.5 billion in the same period last year, dragged down by a 35.6-percent drop in non-tax collections and slower growth in tax revenues.

Tax collections accounted for the bulk of revenues, rising by 0.3 percent to P332.3 billion.

The Bureau of Internal Revenue’s collections dipped by  0.7 percent to P248.4 billion, while the Bureau of Customs posted a 4.2-percent increase to P80.7 billion.

Non-tax collections declined by 35.6 percent to P13.7 billion in August due to lower Treasury income and collections from other offices.

BTr income fell by 29.2 percent to P5.5 billion last month.

From January to August, the government’s budget deficit widened by 21.3 percent to P1.05 trillion from P869.2 billion a year earlier, but remained within the P1.66 trillion full-year deficit program.

As of end-August, government expenditures rose by eight percent to P4.27 trillion from P3.95 trillion in 2025.

Revenue collections, meanwhile, grew by 4.3 percent to P3.22 trillion in eight months from P3.09 trillion in the same period last year.

The eight-month deficit stood at about 64 percent of the P1.66 trillion full-year program set by the Development Budget Coordination Committee.