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The national government’s (NG) gross borrowings nearly tripled in August amid sharp rise in domestic and foreign borrowings, the Bureau of the Treasury (BTr) said.

The latest data from the Treasury showed that total gross borrowings jumped by 192% to PHP 508.53 billion in August from PHP 174.03 billion in the same month a year ago.

Month on month, gross borrowings surged by 206% from PHP 166.11 billion in July.

Domestic borrowings, which made up 97.97% of the total, rose by 198% to PHP 498.21 billion in August from PHP 167.05 billion in the same month last year.

This was composed of PHP 425.61 billion in retail Treasury bonds (RTB), PHP 60 billion in fixed-rate Treasury bonds (T-bonds), and PHP 12.6 billion in Treasury bills (T-bills).

External borrowings, which mainly consisted of project loans, climbed by 47.57% to PHP 10.31 billion in August from PHP 6.99 billion in the previous year.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said elevated gross borrowings in August were likely driven by the latest RTB issuance as the government needed additional funds to plug the budget deficit.

The government raised PHP 507.16 billion from the issuance of RTBs in August, exceeding the PHP 30-billion target.

“The large increase in borrowings can be attributed to the large issuance of domestic debt securities by the government which successfully met the demand for these securities amid investors seeking safe returns,” Reinielle Matt M. Erece, an economist at Oikonomia Advisory and Research, Inc., said in a Viber message. 

End-August borrowing

Meanwhile, NG’s gross borrowings stood at PHP 2.27 trillion in the January-to-August period, up 17.22% from PHP 1.93 trillion a year ago.

The total borrowings accounted for 87.16% of the revised PHP 2.6-trillion financing program for 2025.

Domestic debt accounted for the bulk or 81.19% of total gross borrowings in the first eight months.

Gross domestic debt increased by 11.46% to PHP 1.84 trillion as of end-August from PHP 1.65 trillion in the same period last year. This made up 87.12% of the PHP 2.11-trillion program this year.

Broken down, domestic debt was composed of PHP 941.84 billion in fixed-rate Treasury bonds, PHP 425.61 billion in RTBs, PHP 300 fixed-rate Treasury notes, and PHP 172.45 in T-bills.

As of end-August, gross external debt rose by 50.89% to PHP 426.23 billion from PHP 282.46 billion a year ago. The total foreign borrowings in the January-to-August period accounted for 87.31% of the PHP 488.17-billion program this year.

Broken down, foreign debt was made up of PHP 191.97 billion in global bonds, PHP 171.31 billion in program loans and PHP 62.96 billion in project loans.

External borrowings in the end-August period were also padded by the global bond issuance that raised USD 3.3 billion or PHP 192 billion in late January but settled in February.

Mr. Ricafort said the government would likely exceed its borrowing program with the ballooning budget deficit.

“There is a chance if the budget deficit widened for the rest of 2025 and needed to be funded by additional NG borrowings,” he said.

Separate data from the BTr showed that the fiscal gap swelled by 56.38% to PHP 84.8 billion in August, which brought the eight-month deficit to PHP 869.2 billion.

“The government’s recalibration of debt to increase the share of domestic debt over foreign debt sources is reflective in the composition of new borrowings this August. We may see the same trend in the coming months,” Mr. Erece said.

The government favors domestic sources of debt as it aims to reduce foreign currency risk.

The BTr earlier said it is looking to borrow PHP 437 billion from the domestic market in the fourth quarter, comprised of PHP 262 billion in T-bills and PHP 75 billion in T-bonds.

For 2026, the financing program is set at PHP 2.68 trillion, of which PHP 2.05 trillion will be from local lenders and PHP 627.1 billion from foreign sources.

Higher debt

Meanwhile, the share of Philippines government debt to gross domestic product (GDP) edged up to 57.8% in the second quarter of 2025 from 56.7% a year earlier, according to the Institute of International Finance quarterly debt monitor.

Household debt as a share of GDP slid to 11.3% in the second quarter this year from 12.1% in the same period a year ago.

The domestic financial sector’s debt-to-GDP ratio eased to 7.2% in the second quarter from 7.6% in the same quarter in 2024.

On the other hand, nonfinancial corporates’ debt-to-GDP ratio also eased to 25.7% in the second quarter this year from 26.8% a year ago. — A.R.A.Inosante

Amari Neil B. Dimafeliz,18, first turned to artificial intelligence (AI) in 2023 when his small 3D-printing business started growing faster than he could manage.

Running a youth-led enterprise with limited manpower, he struggled to find employees willing to work for someone still in college. “My age has been an obstacle to hiring people, so I turned to AI because it’s not selective in who it’s performing for,” he said by telephone.

Instead of hiring extra staff, Mr. Dimafeliz invested in a PHP 100,000 printer with AI features that automatically checks the quality of his customized products, which include keychains, figurines, thesis prototypes, coasters, ballpens and pencil cases.

“On the operational side, our printers use artificial intelligence for precautionary measures when there are failures in printing,” he said.

AI also helps market his products. He uses it to generate captions and images for his small business’ social media pages, a task that once ate up hours of his time. For a full-time mechanical engineering student at Mapua University, AI has become a crucial tool for balancing academics with entrepreneurship.

Stories like Mr. Dimafeliz’s illustrate how AI could reshape the way micro, small and medium enterprises (MSME) operate.

MSMEs account for about 99% of all businesses in the Philippines, yet adoption of advanced digital tools remains low. As of 2021, only 14.9% of firms had integrated AI, according to the government think tank Philippine Institute for Development Studies (PIDS).

AI has the potential to transform these businesses, said Ian Jester M. De Vera, head of the research division at the University of the Philippines Institute for Small-Scale Industries (UP ISSI). “Some of the tasks of MSMEs are just repetitive, so if they’re going to leverage AI, they will do away with these tasks,” he told BusinessWorld by telephone.

AI can also help smaller firms scale operations and compete with larger corporations, said John Paolo R. Rivera, a PIDS senior research fellow. “By using AI, MSMEs can better compete with larger firms and participate in digital trade,” he said in a Viber message.

Among its practical benefits: AI can forecast demand, analyze customer behavior, and reduce overstock or shortages. It can personalize marketing strategies and improve logistics efficiency.

Beyond operations, AI can handle invoicing, payroll and appointment scheduling, reducing costs and human error. Virtual assistants and chatbots can also take over routine customer service inquiries, saving time for owners and staff.

AI may even help protect businesses from rising cyberthreats. MSMEs are often prime targets for ransomware and phishing attacks, noted Bambi Escalante, country manager at Fortinet Philippines.

Steep challenges

“Most small and medium businesses don’t have dedicated IT security teams, making it difficult to keep up with evolving threats,” she told BusinessWorld in an e-mailed reply to questions. “This is where AI becomes a game-changer — it automates routine security tasks and helps businesses stay ahead of cyber risks without needing extensive resources.”

A joint study by Google and Access Partnership estimates that if widely adopted, AI-powered products and solutions could unlock as much as P2.8 trillion in economic benefits for Philippine businesses.

Despite its promise, AI adoption among MSMEs faces steep challenges.

For one, resources remain tight. “Let’s face it, MSMEs have limited resources, and some of them are even cash-strapped,” Mr. De Vera said. “If AI would just add to their costs, maybe they would think twice about adopting it.”

Generational gaps also play a role. Many first-generation business founders remain hesitant to use AI themselves. “When I talk about AI, of course they’re amazed, but they instead want their children to learn how to use it, because they don’t know how to use it,” said Reynaldo C. Lugtu, Jr., president and chief executive officer (CEO) at consulting firm Hungry Workhorse.

Digital infrastructure is another major hurdle. Reliable internet access is still uneven across the country. “The foremost barrier is infrastructure, because it’s still a problem, especially in a developing country like the Philippines, to have a reliable internet connection,” Mr. De Vera said.

The Philippines ranked 56^th out of 77 countries in Huawei Technologies’ 2024 Global Digitalization Index, classifying it as a “starter” in digital transformation.

MSMEs also often lack the data needed to fuel AI systems. “AI requires large datasets to function effectively, but many MSMEs struggle with limited or unstructured data,” Mr. Rivera said. This data gap also affects their access to credit, marketing insights and long-term planning.

To address these challenges, organizations are working to strengthen MSMEs’ digital skills. The UP ISSI offers training and mentorship programs, guiding entrepreneurs on responsible AI use, strategy development and data-driven decision making. It has also rolled out a business course covering AI systems, analysis tools and ethical frameworks.

Private firms are innovating as well. Peddlr, a smart point-of-sale (POS) app for small businesses, plans to integrate AI into its analytics and reporting features.

“It is on our product roadmap to incorporate this technology with our POS app, starting with the reports and analytics module,” Peddlr founder and CEO Nel Laygo said in an e-mailed reply to questions.

Mr. Laygo added that MSMEs should begin embedding AI proficiency into their workforce development. “They should start incorporating AI proficiency into internal training to upskill staff and include this as a requirement when hiring new talent, alongside proficiency in Microsoft Word, PowerPoint and Excel,” he said.

Experts say both the government and private sector need to step in by subsidizing AI tools, improving internet infrastructure, and promoting digital literacy. “Both sectors can also invest in digital literacy and training, so this will upskill MSME employees through courses and workshops that will improve their competence in using AI,” Mr. De Vera said.

While MSMEs worldwide are beginning to integrate AI into their operations, many owners remain cautious about overreliance.

Mr. Dimafeliz, whose 3D-printing business continues to grow alongside his studies, sees AI as a helpful partner but not a substitute for creativity.

“AI is not perfect,” he said. “We still have to apply our personal touch to ensure originality. We still need the intervention of human beings.” — Beatriz Marie D. Cruz, Reporter

The Bangko Sentral ng Pilipinas (BSP) could lower borrowing costs as early as October if the economy shows signs of losing momentum, BSP Governor Eli M. Remolona, Jr. said, suggesting that policymakers are not ruling out further easing even after cutting rates for three straight meetings.

“If we see [economic] output slowing down because of the lack of demand, then we would step in, easing policy rates [to] strengthen demand,” he said in an exclusive interview on Thought Leaders with Cathy Yang on One News on Thursday.

But the BSP chief said monetary policy would be ineffective in addressing supply-driven slowdowns. “If it’s a supply thing, there’s little we can do. So, it has to come from a demand side for us to act decisively,” he added.

Last month, the Philippine central bank lowered its benchmark interest rate by 25 basis points (bps) to 5%, marking its third consecutive cut. That brought total easing to 150 bps since August 2024.

Mr. Remolona has repeatedly described the policy setting as a “Goldilocks rate,” balancing inflation and growth.

“We’re in the Goldilocks zone, I would say,” he said. “So, if the forecast stays… we’re going to stay where we are in terms of the policy rate. There may be small adjustments — a pause or an ease — but more or less, we’re going to be at the same range.”

The governor said two quarter-point reductions in October and December are “possible but not likely.” While not ruling them out, he said the central bank is inclined to hold steady if forecasts for both inflation and growth remain intact.

Larger cuts are improbable. “A 50-bp cut is a big shot,” Mr. Remolona said, stressing that easing would likely continue in smaller, incremental steps. He added that only a sharper slowdown in economic activity and a rise in unemployment would prompt more aggressive action.

Philippine inflation averaged 1.7% in the first eight months, below the BSP’s 2-4% target, after quickening slightly to 1.5% in August.

This was the sixth straight month that consumer price growth undershot the target. The economy expanded by 5.5% in the second quarter from a year earlier, quicker than 5.4% in the previous quarter.

The BSP projects full-year growth to settle at the lower end of the government’s 5.5-6.5% goal, with inflation ending the year at 1.7%.

The Monetary Board has two remaining policy meetings this year, on Oct. 9 and Dec. 11. Mr. Remolona said the central bank typically makes decisions every two months as new data come in, but he did not rule out off-cycle action.

“Of course, if it’s really bad, we can move the policy rate even outside our usual schedule of policy meetings, but that’s highly unlikely,” he said.

Beyond the immediate growth-inflation trade-off, Mr. Remolona said policy adjustments also help banks operate more efficiently.

“For me, it’s no longer a monetary policy thing,” he said. “It’s more of a structural thing to help banks be more efficient in terms of lending, pricing their deposits.”

The central bank chief said inflation risks are generally low. The BSP expects price increases to average 3.3% next year and 3.4% in 2027, both within target.

“If it’s not so good data, then of course we’ll ease,” he said. “The risks of higher inflation which would make us tighten, the way we see it now, those risks are small. So, I think we’re comfortable for now.” — Katherine K. Chan

State infrastructure spending declined by 25% in July, amid sluggish disbursements by the Department of Public Works and Highways (DPWH), the Budget department said.

At the same time, Budget Secretary Amenah F. Pangandaman said infrastructure disbursements may remain subdued in the coming months amid the ongoing probe into anomalous flood control projects.

In its latest disbursement report on Thursday, the Department of Budget and Management (DBM) said expenditures on infrastructure and other capital outlays fell by 25.3% to P93.3 billion in July from P124.9 billion in the same month last year.

Month on month, it dropped by 37.3% from P123.8 billion spent on infrastructure in June. 

This marked a reversal of the 6.5% annual increase seen in June after the election ban on public works disbursements was lifted in early May.

The DBM attributed the year-on-year decline in infrastructure spending to weak disbursements by the DPWH, which is currently embroiled in a controversy over anomalous flood control projects.

The Budget department noted the slow DPWH disbursements were due to project implementation schedules, including the timing and phasing of infrastructure activities, as well as delays in procurement, incomplete submission of progress billings and required documents by contractors.

Spending in July was also affected by contractors’ compliance with the new tax clearance requirement of the Bureau of Internal Revenue (BIR) for the release of final payments.

The BIR earlier said the failure of contractors to present their tax clearance will result in the suspension of contract settlements and the imposition of a tax line over the contract amount in favor of the government.

The updated clearance guarantees that every contractor has no outstanding tax liabilities.

“Disbursements for the Revised Armed Forces of the Philippines Modernization Program (RAFPMP) of the DND (Department of Defense) were also lower in July 2025 attributed to the timing of releases, as big-ticket items were scheduled in August,” the DBM said.

At the same time, the DBM said lower spending was partly offset by higher disbursements from the Department of Transportation, driven by local counterpart funding for foreign-assisted projects and the settlement of outstanding payables.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the government should exercise caution to prevent anomalies and corruption allegations.

“However, other infrastructure projects in good order will continue,” he said in a Viber message on Thursday.

For the January-to-July period, overall infrastructure and capital outlays disbursements slipped by 3.2% to P713.5 billion from P736.7 billion in the same period last year.

The decline was driven by combined factors, including the second-quarter election-related ban and timing of disbursements for the defense modernization program.

As of end-July, the DBM released P4.9 billion to the DPWH for nationwide classroom repairs, alongside P3.5 billion earmarked for the restoration of Gabaldon and other heritage school and the implementation of the Last Mile Schools Program.

‘TEMPORARY SLOWDOWN’
Meanwhile, Ms. Pangandaman said infrastructure spending this year was dented by the election ban, and now the ongoing investigation on flood control projects.

The Budget department warned of a temporary slowdown in infrastructure spending as the DPWH conducts tighter due diligence of projects.

“(This) following rigorous due diligence being undertaken by the DPWH to evaluate and validate status of completed projects, and employ measures to enforce stricter verification of progress billings and other payment claims,” the DBM said.

Earlier this month, the DPWH suspended the bidding of all locally funded projects for two weeks, to help the agency implement safeguards against so-called “ghost” projects.

“The DPWH has also since lifted the suspension of bidding and procurement activities for local projects to ensure continuity and timely implementation of the infrastructure program while implementing safeguards to prevent corruption and ensure compliance with existing laws, rules, and regulations,” the Budget department said.

“Infrastructure spending will hopefully normalize and catch up towards the latter part of the year.”

However, Ms. Pangandaman said it’s too early to tell if the infrastructure slowdown will dent economic growth.

“We’re working with the DBCC (Development Budget Coordination Committee) to crunch the numbers. We’ll know more after the next (DBCC) meeting,” she said.

Analysts said they expect spending to further cool until 2026 amid a widening probe on infrastructure projects.

“We may see even slower infra spending in the coming months amid scrutiny of the DPWH and the corruption scandal,” Reinielle Matt M. Erece, an economist at Oikonomia Advisory and Research, Inc., said in a Viber message.

Ateneo Center for Economic Research and Development Director Ser Percival K. Peña-Reyes said the flood control scandal is a “very hot issue” that’s likely to cool infrastructure spending through yearend.

Mr. Ricafort also said slower infrastructure spending could also dampen government spending, which contributes less than a fifth to the country’s economic output.

“Risk is slowdown in infrastructure spending and overall economic growth. But would help narrow the budget deficit and curb growth in overall NG (National Government) debt,” he said. — Aubrey Rose A. Inosante, Reporter

The National Government (NG) is looking to borrow PHP 437 billion from the domestic market in the fourth quarter, the Bureau of the Treasury (BTr) said on Thursday.

In a notice on its website, the BTr said it seeks to borrow PHP 262 billion through the issuance of Treasury bills (T-bills) and PHP 175 billion through Treasury bonds (T-bonds) in the October-to-December period.

The borrowing plan for the fourth quarter is 36.6% lower than the PHP 690-billion borrowing plan for the third quarter.   

It is also 31.45% lower than the PHP 637.448 billion that the government actually raised in the July-to-September period.

“Our bond auctions will be biweekly but the tenor will be dual, similar to what we’ve been doing for the three- and 20-year bonds,” National Treasurer Sharon P. Almanza said in a Viber message.

Ms. Almanza said the breakdown of amounts per tenor for T-bills and T-bonds will be announced in the weekly notice of offering.

For October, the NG plans to borrow P180 billion domestically, consisting of PHP 110 billion in T-bills and P70 billion in T-bonds.

The government will hold auctions for T-bills on Sept. 29, Oct. 6, Oct. 13, Oct. 20 and Oct. 27. It seeks to raise PHP 22 billion from the sale of 91-day, 182-day and 364-day T-bills from each of these auctions in October, but no breakdown was given.

For the Sept. 29 auction, the BTr will raise PHP 7.5 billion each from 89-day and 182-day papers, as well as PHP 7 billion from 364-day T-bills.

For longer-dated offerings, the BTr will auction off PHP 35 billion worth of three-year and 10-year bonds on Oct. 7, and PHP 35 billion worth of seven-year and 25-year bonds on Oct. 21.

For November, the government is looking to borrow PHP 158 billion from the domestic market, composed of PHP 88 billion from T-bills and PHP 70 billion from T-bonds.

The NG seeks to raise PHP 22 billion from each of the four auctions scheduled on Nov. 3, 10, 17 and 24. It will offer 91-day, 182-day and 364-day T-bills at these auctions, but no specific breakdown was given.

The government will offer five-year and 10-year bonds worth PHP 35 billion on Nov. 4, and seven-year and 20-year bonds worth PHP 35 billion on Nov. 18.

In December, the NG will borrow PHP 99 billion from the domestic market, composed of PHP 64 billion from T-bills and PHP 35 billion from T-bonds.

The government is looking to raise PHP 22 billion from the offering of 91-day, 182-day and 364-day T-bills at the Dec. 1 and 8 auctions, and PHP 20 billion at the Dec. 15 auction.

The government scheduled only one T-bond auction in December. It will sell three-year and 10-year bonds on Dec. 2, with the goal of raising PHP 35 billion.

There are less auctions in December to take into account the holiday season.

A trader said demand is expected to be strong in the fourth quarter, while yields could ease further due to the lower supply of bonds relative to the previous quarter’s offering.

“This is a welcome development for investors as there will be choices in terms of tenors.

“Also, expect rates to trend lower since we only have bi-weekly bond auctions next quarter. There should be strong demand given the relatively lower supply,” the trader said.

The trader noted that the BTr will conduct dual bond offerings in the October-to-December period to address demand for short and long tenors, and since the government has almost completed its borrowing plan for the year due to the retail Treasury bond (RTB) offering.

However, the trader expressed concern that investor confidence could be dampened by the ongoing corruption scandal involving anomalous flood control projects.

“Not sure also if it will be something good for our image given that we want to be included in the JPMorgan bond index,” the trader said.

JPMorgan this month tagged Philippine peso-denominated government bonds as “Index Watch Positive,” which is the final review phase for inclusion in its Government Bond Index for Emerging Markets series.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that the lower borrowing program for the fourth quarter has been a consistent trend amid lower maturities and due to less working days during the holiday season.

However, he said the widening budget deficit and lower interest rates may increase the share of domestic borrowings in the government’s total borrowing mix.

Latest BTr data showed gross domestic debt stood at PHP 1.34 trillion as of end-July.

This was composed of PHP 881.84 billion in fixed-rate Treasury bonds, PHP 300 billion in fixed-rate Treasury notes and PHP 159.85 billion in Treasury   bills.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at PHP 1.56 trillion or 5.5% of gross domestic product this year. — Aaron Michael C. Sy, Reporter

The Philippines kept its title as the world’s most disaster-prone nation for a 21^st straight year, with typhoons and floods battering communities while billions of pesos meant to protect them vanish in graft scandals.

The Southeast Asian country posted a risk score of 46.56 in the 2025 WorldRiskIndex, unchanged from last year but still ahead of 192 other nations. India ranked second, followed by Indonesia, Colombia, and Mexico, according to the study released on Wednesday by Germany’s Bündnis Entwicklung Hilft and Ruhr University Bochum.

The index weighs exposure to disasters such as cyclones, floods, and earthquakes alongside vulnerability indicators like poverty, inequality, and health systems. A score of 100 signals extreme risk.

The Philippines faces a broad spectrum of hazards, but river and coastal flooding remain the most significant threats, according to the report.

The ranking highlights how climate change continues to hit the archipelago, which is lashed by about 20 tropical storms each year. The latest assessment comes as the country braces for Tropical Storm Opong, days after Super Typhoon Nando — internationally named Ragasa — plowed through Luzon.

At the same time, government flood control programs are collapsing under the weight of corruption scandals. A sweeping investigation this year exposed widespread misuse of funds, forcing the removal of P255 billion ($4.4 billion) worth of projects from the proposed 2026 national budget. Flood control allocations were cut to zero.

“One problem that has become obvious is that the needed infrastructures like flood control projects are not being built because of corruption,” Maria Ela L. Atienza, a political science professor at the University of the Philippines, said in a Viber message. There seems to be more focus on relief rather than disaster prevention, she added.

China, Mexico and Japan led in disaster exposure, but the Philippines still placed fourth globally with a score of 39.99. The country also ranked “very high” in vulnerability (54.2) and coping capacity (58.54), underscoring weak infrastructure and strained social systems.

Provinces most at risk of flooding included Cagayan, Agusan del Norte, Pangasinan, Pampanga, Maguindanao and Metro Manila, each scoring above 82% in exposure. By contrast, Marinduque, Laguna, Batanes, Sarangani and Dinagat Islands had low flood exposure.

Metro Manila’s flood risk has been worsened by “soil sealing,” where rapid urbanization covers natural surfaces with concrete, preventing water absorption.

The capital sits on a low-lying river plain intersected by the Pasig River and a dense canal network. Laguna, meanwhile, benefits from hilly terrain and the buffering capacity of Laguna de Bay, which absorbs excess water.

GOVERNMENT FAILURES

The Philippines’ top ranking reflects governance failures more than geography, analysts said.

“Risks have skyrocketed because of the fact that public spending on risk management through flood controls and climate change was substandard to nonexistent,” John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said in a Viber message. “Politicians and their cahoots decided to be greedy.”

Despite disaster-related laws and international financing for resilience, spending has skewed toward emergency relief. Manila regularly deploys military and civilian assets for typhoon response, but falls short in long-term prevention such as drainage systems, retention basins, and reforestation.

Ms. Atienza said development plans at the local and national levels should be balanced with effective disaster-risk management.

“Big infrastructures like airports and highways as well as commercial establishments and housing projects should not destroy the environment and cause dangers to people or make areas more disaster-prone,” she added. 

Disaster risk is increasingly shaped by social inequality and weak institutions, even in developed economies, according to the report. In Africa, almost 80% of the continent is classified as high- or very high-risk, while Asia and the Americas remain hotspots.

China, with a risk score of 30.62, ranked eighth overall, while the US did not make the top 10. Globally, the gap between disaster exposure and coping capacities has widened as governments struggle to finance prevention.

The Philippines’ risk score, while slightly lower than last year, remains stubbornly high despite decades of donor-backed disaster management programs. Manila has passed multiple disaster laws, created a national council and tapped international climate finance, but implementation has lagged.

The costs are rising. Super Typhoon Nando caused billions of pesos in damage to agriculture and infrastructure this month, compounding fiscal stress as the government pushes higher social spending and grapples with debt exceeding 60% of GDP.

With flood control funds scrapped in the 2026 budget, analysts said the Philippines risks more economic and human losses.

“The current challenges in flood risk management require a fundamental rethinking of disaster preparation,” according to the 2025 report, noting that extreme weather events are not only increasing in frequency, but are also increasingly exceeding the capacities of existing protection systems.

“At the same time, practical examples from various regions of the world show that successful coping strategies are based on the interplay of several factors: technological innovation, local capacity for action, and ecological resilience,” it added. — Aubrey Rose A. Inosante, Reporter

The Philippines’ budget deficit widened in August as revenues fell faster than spending, adding pressure on the government to borrow more and keep within its deficit ceiling.

The gap ballooned 56% to PHP 84.8 billion (USD 1.5 billion) from a year earlier, according to data released by the Bureau of the Treasury on Wednesday. Compared with July, the shortfall surged more than fourfold from P18.9 billion.

Collections fell 8.8% to PHP 352.5 billion, dragged by a steep decline in nontax revenues, which slid nearly 68% to PHP 21.3 billion. Treasury income dropped 53%, while remittances from other offices tumbled 73%.

Tax revenues, however, inched up 3.4% to PHP 331.2 billion. Bureau of Internal Revenue collections rose 5% to PHP 250.1 billion, offsetting weaker Bureau of Customs receipts, which slipped 1.4% to PHP 77.4 billion.

Government expenditures fell 0.7% to PHP 437.3 billion in August from a year ago, weighed by lower primary spending, which excludes interest payments. Primary outlays dropped 3.5% to PHP 374.2 billion.

Interest payments, by contrast, jumped almost 20% to PHP 63.1 billion. The primary deficit — net of interest costs — widened to PHP 21.7 billion from just PHP 1.4 billion a year earlier.

For January to August, the fiscal gap rose 25% to PHP 869.2 billion from a year earlier. The deficit represents 56% of the PHP 1.56-trillion full-year ceiling, leaving room for additional borrowing in the final four months.

Spending climbed 7.2% to PHP 3.95 trillion, already 65% of the government’s PHP 6.08-trillion expenditure program. Primary spending increased 6% to PHP 3.37 trillion, while interest payments grew almost 15% to PHP 584.1 billion, making up 15% of total disbursements.

Revenue collections rose 3.1% to PHP 3.09 trillion, equivalent to 68% of the PHP 4.52-trillion full-year goal. Tax revenues made up 90% of the haul, rising 8.9% to PHP 2.79 trillion.

The BIR collected PHP 2.14 trillion, up 11%, boosted by higher corporate and personal income taxes, value-added tax, tobacco excise, percentage tax on financial institutions, and documentary stamp duties. The robust performance of the BIR allows the deficit to remain manageable, the Treasury said.

Customs collections edged up 1.1% to PHP 621.4 billion, supported by efforts against smuggling and illicit trade.

Nontax revenues, by contrast, fell 31% to PHP 298.3 billion, though this still accounted for 97% of the PHP 306.5-billion annual target.

Treasury income slipped 5.5% to PHP 189.3 billion, surpassing the revised PHP 179.2-billion goal. The bureau cited higher interest earnings on deposits, dividends from state companies, and remittances from the Philippine Amusement and Gaming Corp. and Manila International Airport Authority.

The primary deficit surged 52% to PHP 285 billion in the eight-month period, accounting for 85% of the total fiscal gap. The Treasury attributed the increase to the government’s push for priority programs and growth-supportive spending.

The government aims to cap the deficit at PHP 1.56 trillion this year, equivalent to 5.5% of gross domestic product (GDP). Officials plan to gradually narrow the shortfall to PHP 1.55 trillion or 4.3% of GDP by 2028. — Aubrey Rose A. Inosante