Gov’t budget gap widened in June but still within 2026 target
The national government’s budget deficit widened in June as spending growth outpaced revenue collections, although fiscal performance remained broadly on track to meet the full-year target, according to the Bureau of the Treasury.
Latest data showed the fiscal shortfall expanded by 9.4 percent year-on-year to P264.3 billion in June from P241.6 billion in the same month last year.
This brought the first-half deficit to P786.8 billion, slightly below the government’s P788.2-billion program for the period by 0.17 percent. The six-month deficit accounted for 47.5 percent of the full-year ceiling of P1.658 trillion.
The wider June deficit came as government expenditures climbed 5.5 percent to P578.7 billion, driven by higher National Tax Allotment shares for local government units, increased subsidies to state-run firms, as well as payments to suppliers and contractors for transportation infrastructure projects.
This outpaced the 2.46-percent increase in revenues, which reached P314.5 billion during the month.
Tax revenues rose 5 percent to P299.3 billion, led by the Bureau of Internal Revenue (BIR), whose collections increased 5.07 percent to P210.7 billion. Meanwhile, collections by the Bureau of Customs (BOC) grew at a faster clip of 11.88 percent to P86.2 billion.
Nontax revenues, however, fell 43.5 percent to P15.1 billion, mainly due to lower income from the BTr after remittances had already been made earlier in the year.
For 2026, the Marcos administration is targeting a budget deficit of P1.658 trillion, equivalent to 5.4 percent of gross domestic product.
The government also aims to raise P4.807 trillion in revenues this year, with first-half collections already reaching P2.4 trillion, or 49.9 percent of the full-year goal. Meanwhile, expenditures totaled P3.02 trillion in the first six months, equivalent to 46.7 percent of the P6.465-trillion spending program.
Looking ahead, Finance Secretary Frederick Go said he is positive that the government remains on track to meet its fiscal goals.
“The Department of Finance is confident about the abilities of our revenue generating agencies to be able to meet their targets for the second half of the year,” he told reporters.
Budget utilization
Meanwhile, separate data from the Department of Budget and Management (DBM) showed that budget utilization of government agencies had slowed in the first half, with the utilization rate easing to 96.9 percent as of end-June from 99 percent a year earlier.
Government agencies utilized P2.65 trillion out of the P2.74 trillion in National Cash Allocations (NCA) released during the period, leaving P84.3 billion unused.
Line departments accounted for most of the unused allocations after utilizing P1.75 trillion of their P1.84-trillion allotment, equivalent to a 95.4-percent utilization rate.
In contrast, other recipients—including subsidies for government-owned and -controlled corporations and allocations for local government units—fully utilized their combined P903-billion allocation.
NCAs are spending authorities issued by the DBM that allow agencies to withdraw funds from the treasury to finance their operations, programs and projects.
