The national government's budget deficit for August 2026 hit ₱161.3 billion, nearly double the ₱84.8 billion shortfall recorded in August 2025, according to Bureau of the Treasury data. That single month pushed the cumulative deficit for the first eight months of the year to ₱1.05 trillion — a 21% increase over the same period last year.
The widening was driven almost entirely by spending, not a revenue collapse. National government expenditures for August reached ₱507.3 billion, up 16% year-on-year, while revenue collections actually held up reasonably well on the tax side: the Bureau of Internal Revenue brought in ₱248.4 billion and the Bureau of Customs ₱80.7 billion, up 4.2%. The real drag was non-tax revenue, which fell 36% for the month, pulling total August collections down 1.9% to ₱346.0 billion even as year-to-date revenue is still up 4.27% at ₱3.22 trillion.
Two specific items account for much of August's expenditure spike, per the Treasury data: a settlement of PhilHealth arrears, and larger National Tax Allotment (NTA) shares released to local government units. Year-to-date, interest payments on the national debt have reached ₱686.5 billion — a number that keeps climbing alongside the record ₱19.39-trillion national debt Pulpulitiko has previously reported on.
Buried in the same numbers is a detail that cuts against the headline: the government's August primary balance — spending minus revenue, excluding interest payments — actually swung to a ₱95.6-billion surplus, compared to a ₱21.7-billion primary deficit in August 2025. Strip out debt-servicing costs and one-off settlements like the PhilHealth arrears, in other words, and the government's day-to-day fiscal position improved from a year ago. The overall deficit widened anyway, because interest and the arrears payout outweighed that underlying improvement — a distinction the raw ₱161.3-billion headline number doesn't convey on its own, and one the Treasury's release did not spell out in a public statement.
The Treasury's data characterizes the eight-month deficit as "still tracking within the full-year program," but the cited reporting did not include the specific full-year deficit ceiling against which that claim can be checked — leaving readers to take the assurance on faith rather than arithmetic.
Context
The deficit widening lands the same week Pulpulitiko reported that the Asian Development Bank and S&P Global Ratings both slashed their 2026 Philippine growth forecasts, citing fallout from the flood-control corruption scandal and a 32% drop in state infrastructure spending — even as the Department of Budget and Management previously reported releasing 94.1% of the 2026 budget, with the DPWH, the agency at the center of that scandal, posting a near-perfect 99.5% release rate. Rising debt-service costs and one-off settlements like PhilHealth's arrears add pressure to a fiscal picture already strained by weak growth and a widening current account gap.