The Department of Finance (DOF) reported an increase in the national government's budget deficit in August due to higher expenditures and a decline in revenue collections.

During the month, the Marcos administration’s fiscal deficit amounted to P133 billion, a substantial 85 percent surge compared to the P72 billion gap recorded in August of the previous year.

Based on the Bureau of the Treasury report, this upturn was primarily driven by a double-digit growth in public spending, while both tax and non-tax revenues registered a year-on-year contraction.

Total expenditures in August reached P443.6 billion, indicating a 10 percent increase from the P404.5 billion spent in the same period last year.

Within this expenditure, interest payments notably rose by 38 percent, totaling P42.7 billion compared to P30.8 billion in the same period the previous year.

Additionally, other expenses, including infrastructure investments, posted a seven percent increase to P400.9 billion from P373.7 billion.

On the other hand, government revenue faced a decline of 6.5 percent from P332.4 billion to P310.6 billion in August of the current year.

The Treasury report also revealed that both the Bureau of Internal Revenue (BIR) and the Bureau of Customs experienced a decrease in revenue collections compared to the previous year.

The BIR, serving as the main tax agency of the government, collected P213.5 billion in August, a six percent decline from the P228.9 billion collected during the same period last year.

Similarly, the revenue collected by Customs decreased by five percent, amounting to P75 billion compared to P78.9 billion in the previous year.

Finance Secretary Benjamin E. Diokno explained that the decline in the government's tax collection can be attributed to a decrease in the number of business days during the month.

Diokno noted that aside from regular holidays, the inclement weather conditions also led to work suspensions in August, further affecting tax collection.

Meanwhile, non-tax revenues experienced a 17 percent decrease from P22.7 billion to P18.8 billion.

"The explanation is that, I think their collection days were reduced due to inclement weather and class suspensions caused by typhoons," Diokno said.

"Perhaps the same applies to non-tax revenue because there are no classes, no office work, and thus no collection," he added.

However, the finance chief reassured that the tax agencies would compensate for the shortfall in this month, indicating efforts to make up for the reduced revenue collection.

Excluding interest payments, the government recorded a primary deficit of P90.3 billion in August, marking a 49 percent increase compared to P41.3 billion deficit in 2022.

The budget gap for August contributed to a cumulative deficit of P732.5 billion for the first eight months of the year, a 12 percent decrease compared to the P833 billion deficit reported in the same period last year.

Revenues for the January to August period amounted to P2.582 trillion, higher by nine percent from P2.368 trillion a year ago.

The BIR saw a nine percent improvement in its revenue performance for the eight-month period, reaching P1.71 trillion compared to P1.559 trillion previously.

Diokno said the BIR’s end-August collection represents 65 percent of the full-year target for 2023.

Likewise, the Customs achieved overall collection growth of four percent to P581.5 billion from P559.2 billion last year.

Diokno noted that this amount already represents 67 percent of its 2023 target.

On the expenditure side, total spending amounted to P3.315 trillion, reflecting a three percent increase from P3.201 trillion in the previous year.