+34
The Philippines' fiscal gap ballooned by 461.73% to P106.3 billion in July due to increased government spending on social assistance programs and infrastructure projects. Revenue growth was slow due to the economic slowdown in the first half of 2026, leading to a widening primary budget deficit.
The Philippines' fiscal gap ballooned by 461.73% to P106.3 billion in July from P18.9 billion in the same month a year earlier, due to increased government spending on social assistance programs and infrastructure projects such as the Unified Package for Livelihood, Industry, Food, and Transport framework, as well as the implementation of projects under the Revised Armed Forces of the Philippines Modernization Program.
Total revenue collections inched up by 2.12% to P482.3 billion in July from P472.3 billion in the same month a year ago, with tax revenues increasing by 7.02% to P452.7 billion. Despite these gains, the Treasury attributed a decline in nontax revenues to the timing of dividend remittances by the Bangko Sentral ng Pilipinas (BSP) and said the widening deficit could be attributed to greater cash disbursements and expenditures relative to revenue collections.
The fiscal gap widened by 13.85% to P893.1 billion from the P784.4-billion deficit last year, representing 53.84% of the upwardly revised P1.659-trillion deficit ceiling approved by the Development Budget Coordination Committee (DBCC) in May. Total revenue collections rose by 5.05% to P2.87 trillion in the seven-month period from P2.73 trillion recorded in the same period a year ago, with tax revenues increasing by 5.66% to P2.595 trillion. Expenditures increased by 7.02% to P3.764 trillion from P3.517 trillion a year ago.
The primary budget deficit widened by 3.36% to P272.2 billion in the first seven months from P263.4 billion in the same period last year, which some experts attributed to the economic slowdown in the first half of 2026, with slower consumer spending and capital formation leading to sluggish VAT and excise tax collections, and corporate income tax collections impeded by slower corporate expansion and downscaled business activities. The BSP remitted P59 billion in February and P3.4 billion in July this year, compared with P18.9 billion in July 2025, which contributed to the decline in nontax revenues.
According to the BTr, collections by the Bureau of Internal Revenue (BIR) increased by 6.92% to P358.4 billion in July from P335.3 billion a year ago, while collections by the Bureau of Customs (BoC) jumped by 7.48% to P91.6 billion in July from P85.2 billion last year. The BTr attributed the increase in BoC collections to a significant uptick in duties and value-added tax (VAT) collection from imports primarily due to the stronger Philippine currency.
On the other hand, nontax revenues declined by 39.92% to P29.6 billion in July from P49.3 billion last year due to Treasury income plunging by 48.31% to P18.8 billion and revenues from other sources also declining. The Philippine economy grew by just 2.6% in the first half of 2026, much slower than the 5.4% expansion a year ago, as elevated inflation dampened household consumption while a steep decline in public construction dragged investment.
Francisco Cid L. Terosa, an associate professor and former dean of the University of Asia and the Pacific School of Economics, said the results reflect a more complex situation affecting the Philippine economy and the global economy as a whole, and the Philippine government will need to reassess its policies and budget priorities to address the economic challenges ahead
Please follow us on Google to support usPhilippines Fiscal Gap Government Spending Social Assistance Programs Infrastructure Projects Revenue Growth Economic Slowdown Primary Budget Deficit
Philippines Latest News, Philippines Headlines
Similar News: You can also read news stories similar to this one that we have collected from other news sources.
Vehicle sales in the Philippines fall 2.5% year-on-year in JulyTotal vehicle sales in the Philippines decreased by 2.5% to 37,319 units in July 2026 compared to the same month last year, according to industry data. The decline is attributed to weak consumer sentiment affecting demand for big-ticket purchases.
Read more »
Philippines Hospitals Coordinate to Shield Patients Amid Leptospirosis SurgeThe Malacanang has pledged that Philippine General Hospital will accommodate patients with leptospirosis when the National Kidney and Transplant Institute reaches full capacity. A surge of cases spurred by flooding and successive typhoons has stretched the NKTI. Officials will transfer non-leptospirosis patients to PGH, freeing beds for specialized treatment, as part of a health priority highlighted by CAU.
Read more »
Philippines to Plant 25.3 Million Coconut Trees in 2026, Aiming for 100 Million by 2028The Philippine Coconut Authority (PCA) plans to plant 25.3 million coconut trees in 2026, aiming to reach 100 million before the end of the Marcos administration in 2028. The PCA has planted 8.6 million in 2024 and 15.3 million in 2025, with a buffer of 15-20 million trees to account for mortality. Coconut production reached 14.506 million metric tons by the end of 2025.
Read more »
PH fiscal deficit widens to P106.3 billion in JulyThe Philippine government posted a P106.3-billion deficit in July, wider than the P18.9-billion deficit a year ago, as expenditures grew faster than revenues, data released by the Bureau of the Treasury (BTr) on Thursday showed.
Read more »