Gov’t back to budget deficit in May, but smaller

The Marcos administration’s budget balance returned to a deficit in May, albeit smaller year-on-year, after spending moderated due to the election-related ban on expenditures.

The government recorded a fiscal shortfall of P145.2 billion, a reversal from the preceding month’s surplus of P67.3 billion, according to the latest cash operations report of the Bureau of the Treasury (BTr).

A deficit means the state spent more than it earned during a period. But figures showed the budget gap in May narrowed by 17 percent.

That put the five-month fiscal position to a deficit of P523.9 billion, which was 29.41 percent bigger year-on-year. For this year, the Marcos administration is targeting to borrow P2.55 trillion from creditors at home and abroad to plug a projected budget hole amounting to P1.54 trillion. That deficit limit is equivalent to 5.3 percent of the country’s gross domestic product (GDP).

Dissecting the report of the BTr, expenditures expanded by 3.81 percent in May to P578.2 billion. The Treasury said this clip marked a “moderation” in disbursements due to the 45-day ban on expenditures ahead of the May 12 election.

Since the beginning of the year, the government has spent P2.5 trillion, up by 9.71 percent.

Meanwhile, total revenues grew by 13.35 percent to P433.1 billion. This put the year-to-date collection to P1.95 trillion, marking a 5.41-percent increase.

Collections of the Bureau of Internal Revenue (BIR) reached P242.7 billion in May. This represented a 10.71-percent growth driven by receipts from corporate income tax, personal income tax, excise tax on tobacco products, taxes on government securities and levies on banks and financial institutions.

Since the beginning of the year, BIR raked in P1.35 trillion, growing by 13.8 percent.

“The Bureau’s intensified collection effort, strengthened campaign against fake transactions, ongoing digital transformation, and continued crackdown on illicit tobacco trade have contributed to the improved performance for the said month,” the Treasury said.

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Meanwhile, the Bureau of Customs (BOC) generated P75.7 billion in May. This, however, was 6.9 percent lower year-on-year due to lower tariffs on imported rice and battery-powered electric vehicles.

In the January to May period, the BOC collected P381.7 billion, relatively flat on an annual basis.

Nontax revenues posted a strong growth of 40.93 percent to P110.2 billion in May, thanks to fatter dividend remittances from state-owned corporations. This sent the year-to-date haul to P200.9 billion—a 24.75-percent decline due to several one-off gains last year.

Despite inheriting a larger debt stock, the Department of Finance said the Marcos administration has already made improvements in cutting the government debt-to-GDP ratio to 60.7 percent in 2024 via “a prudent debt management strategy.”