The national government spent ₱507.3 billion in August and collected ₱346 billion, leaving a hole nearly twice the size of last year's. The Bureau of the Treasury has a one-line explanation. The arithmetic is less comforting.
According to The Philippine Star (Aubrey Rose Inosante, Sept. 25), the August budget deficit reached ₱161.3 billion, up from ₱84.8 billion a year earlier, a 90.2 percent increase and a ₱76.5 billion widening.
The numbers
Per the Star, total spending rose 16 percent to ₱507.3 billion from ₱437.3 billion. Primary expenditures, which exclude interest, were ₱441.6 billion, up 18 percent. Interest payments rose nearly 4 percent to ₱65.6 billion. The largest single driver was ₱58.6 billion in budgetary support to PhilHealth for premiums of indigent members, senior citizens and point-of-service patients; higher national tax allotment shares to local governments also added to disbursements.
On the other side of the ledger, total revenue fell 1.9 percent to ₱346 billion from ₱352.5 billion. Tax collections edged up 0.3 percent to ₱332.3 billion. The Bureau of Internal Revenue dipped 0.7 percent to ₱248.4 billion, while the Bureau of Customs rose 4.2 percent to ₱80.7 billion. Non-tax revenue dropped 35.6 percent to ₱13.7 billion, and Bureau of the Treasury income fell 29.2 percent to ₱5.5 billion.
The Treasury's explanation
The Bureau of the Treasury attributed the widening mainly to the settlement of PhilHealth arrears, alongside a revenue slip, the Star reported. On interest, it cited "coupon servicing on additional domestic debt securities," partly offset by lower foreign payments tied to a shift in the settlement date of global bond debt servicing.
The framing invites a fair question that the report does not answer: if the deficit jump is largely arrears being cleared, how much of the ₱58.6 billion was a one-off, and how much recurs in the months ahead? The Treasury statement as reported does not say. It also does not say why non-tax income, a category that fell by more than a third, dropped so sharply.
The eight-month picture
For January to August, the deficit widened 21.3 percent to ₱1.05 trillion from ₱869.2 billion, still within the ₱1.66 trillion full-year program, the Star reported. But the eight-month shortfall already equals about 64 percent of the Development Budget Coordination Committee's full-year program, with four months to go. Expenditures rose 8 percent to ₱4.27 trillion; revenues grew 4.3 percent to ₱3.22 trillion.
The one line that is up
Customs is the exception. According to the Philippine Canadian Inquirer (Abi Sarabia M., Oct. 4), the Bureau of Customs collected ₱757.406 billion in January to September, against a target of ₱748.494 billion, a ₱8.913 billion (about 1.2 percent) surplus and roughly 7.9 percent above the same period last year by our calculation from the outlet's figures. The bureau credited tighter import monitoring, improved valuation and classification, enforcement and digitalization. It aims for ₱1 trillion in 2026, which would require about ₱242.6 billion in the last three months. The article names no officials and carries no direct quotes. We have not independently established how much of Customs' gain is price effect, for instance from a weaker peso or higher oil valuations, rather than enforcement; other outlets have suggested the former, but we could not read those reports.
What we still don't know
Neither report gives a revised full-year deficit outlook or says whether the Treasury expects the BIR, the biggest revenue line, to recover. The Treasury also did not quantify what portion of the August gap was one-time.
Context
The deficit numbers land as the House passed the ₱7.2-trillion 2027 budget on second reading and as Pulpulitiko has reported the national debt at a record ₱19.61 trillion at end-August. A government borrowing to pay arrears while its main tax collector slips is not a crisis on its own, but it is the backdrop for the 2027 spending plan.
Sources
- The Philippine Star, "Budget deficit bloats to ₱161.3 billion in August," Aubrey Rose Inosante, Sept. 25, 2026: https://www.philstar.com/business/2026/09/25/2558672/budget-deficit-bloats-p1613-billion-august
- Philippine Canadian Inquirer, "BOC collections reach ₱757.4 billion, exceed 9-month target," Abi Sarabia M., Oct. 4, 2026: https://canadianinquirer.net/2026/10/04/boc-collections-reach-p757-4-billion-exceed-9-month-target/