NG posts PHP 11.2-B surplus in October

The national government’s (NG) fiscal position swung to a surplus in October as revenues and expenditures declined amid a corruption scandal, the Bureau of the Treasury (BTr) said on Wednesday.

Data from the Treasury showed a PHP 11.2-billion surplus in October, a turnaround from the P248.08-billion deficit in September and wider than the PHP 6.3-billion surplus seen in October 2024.

This was the first budget surplus since the PHP 67.3-billion surplus in April.

In October, government expenditures fell by 7.76% to PHP 430.6 billion from PHP 466.8 billion in the same month last year.

October marked the third straight month that expenditures declined on an annual basis, as disbursements for public works projects were tightened amid a widening corruption probe.

Primary spending — which refers to total expenditures minus interest payments — fell by 9.29% to PHP 373.2 billion in October from PHP 411.4 billion a year earlier.

Interest payments rose by 3.57% to PHP 57.4 billion in October this year from PHP 55.4 billion in the same month in 2024.

At the same time, revenue declined by 6.64% to PHP 441.7 billion in October from PHP 473.1 billion in the same month last year.

Tax revenues inched down by 0.09% to PHP 414.5 billion in October from PHP 414.9 billion in the same month in 2024.

The bulk or 69.62% of tax revenues came from the Bureau of Internal Revenue (BIR), whose collections rose by 1.02% to PHP 328.8 billion in October from PHP 325.5 billion a year ago.

This included a PHP 211-billion tax refund, which pushed the gross BIR collections to HP P329.1 billion.

“This robust performance was driven by collections from corporate income tax, personal income tax, value-added tax, percentage tax on banks/financial institutions, and excise tax on tobacco products,” the BTr said.

The Bureau of Customs (BoC) saw revenues fall by 4.52% to PHP 83 billion in October from PHP 86.9 billion a year ago, as a ban on rice imports started in September.

Nontax revenues plunged by 53.29% to PHP 27.2 billion in October from PHP 58.3 billion in the same month in 2024.

BTr revenues dropped by 13.82% to PHP 12.5 billion in October, while other offices slid by 66.39% to PHP 14.7 billion.

Reinielle Matt M. Erece, an economist at Oikonomia Advisory and Research, Inc., said in a Viber message that the wider surplus in October is mainly caused by the sharp decline in government spending.

“Since public spending issues became a hot topic, the government became very cautious to avoid backlash, thus spending went down significantly,” he said.

However, he noted that revenues also declined due to slower economic activity and less tax filings.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort attributed the budget surplus to the government’s lower disbursement in implementation of anti-corruption measures.

The wider surplus could also signal more disciplined spending, Mr. Ricafort said in a Viber message.

Mr. Erece also noted that a surplus is not necessarily a positive sign and may signal poor budget efficiency.

“Surpluses mean that there are still cash or resources that can be used to further drive growth,” he said.

10-month deficit

For the first 10 months, the NG budget deficit sharply widened to PHP 1.11 trillion from the PHP 963.9-billion gap in the same period last year.

“The 10-month fiscal gap was underpinned by a 1.13% growth in revenues, amidst the non-recurrence of last year’s extraordinary nontax receipts, matched with a modest 3.9% expansion in expenditures,” the BTr said.

The Treasury said the end-October fiscal gap showed the “government’s continued implementation of priority programs and projects to accelerate inclusive economic growth and drive meaningful social transformation.”

“The year-to-date deficit remains in line with the government’s fiscal consolidation goal at 70.83% of the FY 2025 revised full-year target of P1.56 trillion,” BTr said.

State spending rose by 3.9% to PHP 4.91 trillion in the January-to-October period. This was already 80.8% of the PHP 6.08-trillion revised full-year expenditure program.

Primary expenditures rose by 2.45% to PHP 4.19 trillion as of end-October, while interest payments went up by 13.24% to PHP 723.2 billion.

“The minimal growth in primary expenditures was affected by the contraction in infrastructure spending amid the ongoing probe on the DPWH’s flood control issues and review of project implementation,” it said.

Meanwhile, total revenue collection during the January-to-October period slipped by 1.13% to PHP 3.81 trillion. The BTr said the cumulative collection was 84.25% of the PHP 4.52-trillion revised full-year program.

Tax revenues rose by 7.45% to PHP 3.47 trillion, which was already 82.28% of the PHP 4.21-trillion target.

BIR collections went up by 7.45% to PHP 3.47 trillion, accounting for 82.35% of the agency’s PHP 3.22-trillion full-year target.

Customs collection inched up by 0.91% to PHP 784.6 billion as of end-October. This was 81.84% of the revised PHP 958.7-billion program for the year.

Nontax revenues plunged by 36.71% to PHP 341.3 billion for the first ten months of the year, even as it has already exceeded the PHP 301.5-billion full-year nontax revenue program by 11.37%.

Treasury income slipped by 6.75% to PHP 209.6 billion as of end-October, while other offices’ income slumped by 58.12% to PHP 131.7 billion.

In the coming months, Mr. Ricafort said there is still a “good chance” that the NG could hit the PHP 1.56-trillion budget deficit ceiling by yearend.

“(This) could be made possible by further fiscal reform measures, tax reform measures, especially anti-corruption measures/reforms to increase the structural source of National Government revenues and to prevent corruption, wastage, leakages on the government expenditure side, as part of the overall priority on governance reforms,” he said. — Aubrey Rose A. Inosante, Reporter