Philippine revenue gains narrow Q1 budget deficit

Stronger revenue collections helped narrow the National Government’s budget deficit in the first quarter of 2026 to PHP 355.5 billion, down 20.30 percent, or PHP 90.5 billion, from the PHP 446.0 billion shortfall recorded in the same period in 2025, the Bureau of the Treasury said.

The Treasury said in its March 2026 Cash Operations Report, released April 23, that the improvement was supported by double-digit revenue growth in the first three months of the year.

The March budget deficit, however, slightly widened to PHP 349.7 billion, up 1.96 percent, or PHP 6.7 billion, from PHP 342.9 billion a year earlier.

The monthly deficit increased because expenditures rose by PHP 32.6 billion year-over-year, outpacing the PHP 25.8 billion increase in revenues.

Total revenue collections in March reached PHP 305.1 billion, up 9.25 percent, or PHP 25.8 billion, from PHP 279.3 billion in March 2025.

For the three-month period, revenues improved by 13.74 percent, or PHP 137.1 billion, to PHP 1.14 trillion from PHP 998.2 billion a year earlier.

The fiscal table on page 3 placed first-quarter revenues at PHP 1,135.3 billion in 2026, compared with PHP 998.2 billion in 2025.

Tax collections accounted for 85.37 percent, or PHP 969.2 billion, of first-quarter revenues.

Non-tax collections made up 14.63 percent, or PHP 166.1 billion, more than doubling the PHP 66.6 billion collected in the same period in 2025 because of earlier dividend remittances.

In March, tax revenues rose to PHP 276.5 billion from PHP 259.6 billion, a gain of PHP 16.9 billion, or 6.51 percent.

The Bureau of Internal Revenue collected PHP 187.3 billion in March, up 6.60 percent, or PHP 11.6 billion, from PHP 175.7 billion a year earlier.

The March BIR figure was net of a PHP 11.4 billion tax refund, while gross BIR collections stood at PHP 198.6 billion inclusive of the refund.

For the first quarter, BIR collections reached PHP 719.2 billion, up 4.17 percent, or PHP 28.8 billion, from PHP 690.4 billion in the same period in 2025.

The first-quarter BIR figure was net of a PHP 13.6 billion tax refund, while year-to-date gross BIR collections reached PHP 732.7 billion inclusive of the refund.

The Treasury attributed the BIR’s growth to intensified tax administration, digital transformation, and aggressive efforts to curb revenue leakages.

The Bureau of Customs collected PHP 84.8 billion in March, up 5.50 percent, or PHP 4.4 billion, from PHP 80.4 billion a year earlier.

BOC collections for the first quarter reached PHP 239.4 billion, up 3.47 percent, or PHP 8.0 billion, from PHP 231.4 billion in the same period last year.

The Treasury said the BOC’s performance was supported by the Integrity, Accountability and Modernization Program.

The program helped streamline operations, improve transparency, maximize collections through strategic auctions of forfeited luxury assets, and enforce compliance through intensified post-clearance audits.

March collections from other tax offices rose to PHP 4.5 billion from PHP 3.6 billion, an increase of PHP 0.9 billion, or 24.38 percent.

First-quarter collections from other tax offices increased to PHP 10.6 billion from PHP 9.7 billion, a gain of PHP 0.8 billion, or 8.67 percent.

Non-tax revenues in March reached PHP 28.5 billion, up 45.54 percent, or PHP 8.9 billion, from PHP 19.6 billion a year earlier.

The increase was driven by early dividend remittances from government-owned and controlled corporations recorded under Bureau of the Treasury income.

BTr income in March rose to PHP 20.9 billion from PHP 8.7 billion, an increase of PHP 12.2 billion, or 141.14 percent.

For the first quarter, BTr income surged to PHP 130.0 billion from PHP 32.3 billion, up PHP 97.6 billion, or 301.90 percent.

Other non-tax offices collected PHP 7.6 billion in March, down PHP 3.3 billion, or 30.27 percent, from PHP 10.9 billion a year earlier.

For the first quarter, other non-tax offices collected PHP 36.1 billion, up PHP 1.8 billion, or 5.35 percent, from PHP 34.3 billion.

Grants included under other offices amounted to PHP 485.0 million in March 2026, compared with PHP 1.0 million in March 2025.

First-quarter grants reached PHP 518.0 million in 2026, compared with PHP 67.0 million in 2025.

National Government disbursements in March amounted to PHP 654.8 billion, up 5.23 percent, or PHP 32.6 billion, from PHP 622.2 billion a year earlier.

The Treasury said the increase was mainly due to higher National Tax Allotment shares of local government units.

Spending was also lifted by releases for local governments’ special shares in the proceeds of national taxes from tobacco excise tax and the Local Government Support Fund.

March spending was further buoyed by increased budgetary support to government-owned and controlled corporations.

The government also released PHP 20.0 billion to the Department of Energy for the Emergency Energy Program to help augment fuel supply amid the Middle East conflict.

Cumulative disbursements reached PHP 1.49 trillion as of end-March, up 3.22 percent, or PHP 46.6 billion, from PHP 1.44 trillion a year earlier.

The fiscal table on page 3 showed expenditures at PHP 1,490.8 billion in the first quarter of 2026, compared with PHP 1,444.2 billion in 2025.

Primary expenditures made up 85.28 percent, or PHP 558.4 billion, of monthly disbursements.

Primary expenditures in March rose 4.55 percent, or PHP 24.3 billion, from PHP 534.1 billion a year earlier.

Year-to-date primary expenditures reached PHP 1.22 trillion, up 1.20 percent, or PHP 14.4 billion, from PHP 1.20 trillion in the same period last year.

The fiscal table placed first-quarter primary expenditures, listed as “others,” at PHP 1,217.6 billion in 2026, compared with PHP 1,203.2 billion in 2025.

Interest payments in March rose to PHP 96.4 billion, up 9.38 percent, or PHP 8.3 billion, from PHP 88.1 billion a year earlier.

First-quarter interest payments increased to PHP 273.1 billion, up 13.33 percent, or PHP 32.1 billion, from PHP 241.0 billion in the same period in 2025.

After deducting interest payments from expenditures, the government recorded a primary deficit of PHP 253.3 billion in March.

The March primary deficit was slightly lower than the PHP 254.8 billion posted a year earlier by 0.61 percent, or PHP 1.5 billion.

The cumulative primary deficit narrowed to PHP 82.4 billion in the first quarter, down 59.83 percent, or PHP 122.7 billion, from PHP 205.0 billion in the same period in 2025.