March gov’t budget deficit widest in 15 months on revenue drop

MANILA, Philippines — The Philippine government in March registered its largest budget deficit in 15 months as revenues contracted amid strong growth in spending.

The state’s fiscal shortfall had widened by 91.78 percent year-on-year to P375.7 billion in March, according to the latest cash operations report of the Bureau of the Treasury (BTr).

This was the biggest budget gap since the P400.96-billion deficit in December 2023.

That sent the fiscal gap in the first quarter to P478.8 billion, 75.62 percent bigger than the shortfall recorded a year ago.

To bridge the budget gap, the Marcos administration would have to borrow money from creditors at a time when interest rates are not going down as fast as many borrowers would want to.

Data showed that revenues sagged by 3.01 percent in March to P279.3 billion, following a 69.36-percent contraction in nontax revenues to P19.6 billion.

Dividends, tax collections

Unlike in the first quarter of 2024, when 18 state-owned companies had remitted their dividends to the Treasury early, the BTr said only three were able to do so this year.

“Nevertheless, non-tax revenues are expected to improve in the succeeding months, with dividends from the government-owned and controlled corporations set to be remitted to the National Treasury starting May 2025,” the BTr said.

But tax revenues, which accounted for the bulk of total receipts, grew by 15.97 percent to P259.6 billion.

The Bureau of Internal Revenue saw its collections jump by 20.86 percent to P175.7 billion in March, while the Bureau of Customs raised P80.4 billion, up by 7.3 percent.

In the first three months, revenues hit P998.2 billion, marking a 6.9-percent growth.

Spending surge

Meanwhile, the BTr said the government spent P655 billion in March. This meant a jump of 35.37 percent.

Of that amount, P566.9 billion went to primary expenditures on government programs and projects, growing by 37.29 percent.

The BTr said it recorded higher disbursements in the Department of Public Works and Highways (DPWH) for its road infrastructure program and regular operating requirements. It was the same with the Department of Social Welfare and Development, considering its various protective services programs.

The rest of the funds were spent on interest payments, which climbed by 24.21 percent to P88.1 billion.

In the first quarter, expenditures surged by 22.43 percent to P1.48 trillion.

A-rating dream

The Marcos administration, which is aiming for “A” credit rating for the government, is targeting to borrow P2.55 trillion in 2025.

This is intended to plug a projected budget hole amounting to P1.54 trillion, or equivalent to 5.3 percent of the country’s gross domestic product.

By sources of financing, the government will borrow P507.41 billion from foreign investors this year. The remaining P2.04 trillion is targeted to be raised from domestic lenders.

(2025/05/01-02:06)