Philippines National Deficit Expands in September Due to Increased Government Spending

Manila – The national government of the Philippines saw its budget deficit increase to PHP250.9 billion in September 2023, a significant rise from PHP179.8 billion in the previous year. This comes amid lower revenue collections and increased expenditures on social welfare programs and capital projects.

According to a news release by the Philippines News Agency, the government collected revenues of PHP255.4 billion in September, a decrease from PHP288.8 billion in the same month last year. However, the year-to-date revenue of PHP2.837 trillion represents 76.10 percent of the full-year target of PHP3.729 trillion. This amount is also 6.79 percent higher year-on-year, surpassing the nine-month target by 2.98 percent, or PHP82.1 billion. Tax revenues accounted for 89.5 percent of the total collection, while 10.45 percent came from non-tax sources.

Government expenditures for the month amounted to PHP506.3 billion, which is an 8.06 percent increase compared to PHP468.6 billion in September 2022. The BTr attributed this rise primarily to the execution of banner social protection and health programs by the Department of Social Welfare and Development and the Department of Health. It also noted increased capital outlays by the Department of Public Works and Highways.

Year-to-date, government disbursements totaled PHP3.821 trillion, a 4.12 percent increase from last year. According to the BTr, strong disbursement performance in the third quarter helped to reduce government underspending to PHP40.9 billion, or 1.06 percent of the program for the first nine months of this year. This is a marked improvement from the PHP170.5 billion underspending recorded in the first semester.

For the first nine months, the fiscal deficit narrowed to PHP983.5 billion, down 2.89 percent year-on-year, and 11.11 percent lower than the PHP1.106 trillion target. The BTr noted that this year-to-date deficit is only 66 percent of the PHP1.499 trillion full-year program, which is attributed to higher revenue and lower expenditure performance than initially projected.