The Marcos administration has surpassed its budget deficit ceiling for the first half of the year, as the actual shortfall grew considerably compared to the same period last year, primarily due to revenues falling short of expectations.

The Bureau of the Treasury reported on Thursday, July 24, that the national government incurred a ₱765.5 billion fiscal deficit from January to June this year, a 25 percent increase compared to ₱613.9 billion in the same period last year, and it exceeded the ₱760.7 billion program for the period.

The actual six-month fiscal deficit was 0.6 percent or ₱4.8 billion higher than the government’s first-half fiscal deficit ceiling amid “accelerated and higher public spending to support economic growth,” the treasury said.

Collected revenues totaled ₱2.26 trillion at end-June, 5.2 percent higher than last year’s level, but slightly lower than the targeted ₱2.28 trillion.

Tax revenues accounted for 89.9 percent or ₱2.03 trillion of total collections in the first half. It increased by 10.7 percent from a year ago.

The collections of the Bureau of Internal Revenue (BIR), the country’s top tax-collection agency, soared to ₱1.55 trillion, up 14.1 percent from a year ago. According to the Treausry, this was mainly driven by increases in corporate income tax (CIT), value-added tax (VAT), and personal income tax (PIT).

“Additional sources of higher revenue came from increased excise tax collections on tobacco, including electronic cigarettes, through the [BIR’s] continued efforts to intensify the crackdown on the illicit tobacco trade and the strict implementation of the mandatory excise tax stamps on vapor products,” the bureau said.

Meanwhile, the Bureau of Customs (BOC), the country’s second-largest revenue agency, collected ₱458.8 billion in January to June, slightly higher than last year’s ₱455.5 billion end-June take.

Of the total, non-tax revenues made up the remaining 10.1 percent. Total collections for the six-month period dropped by 27.5 percent, falling to ₱227.7 billion from ₱314.2 billion in the same period last year.

Despite this contraction, the treasury noted that the six-month performance “still exceeded the ₱221.4-billion program by 2.9 percent, driven by better-than-expected BTr income performance.”

Meanwhile, public spending from January to June expanded by 9.5 percent to ₱3.03 trillion from last year’s ₱2.76 trillion. The treasury noted that the “spending for the first semester remained within the ₱3.04-trillion program for the period.”

Primary spending during the period reached ₱2.61 trillion, up by 9.4 percent. Meanwhile, interest payments (IPs) as of end-June stood at ₱414.8 billion, a 10-percent increase from last year’s ₱377.2 billion.

Total revenues in June alone increased by 3.5 percent to ₱306.9 billion, as strong tax collection growth offset the impact of last year’s one-time non-tax remittances.

The BIR collected ₱200.5 billion during the month, 16.2-percent higher than a year ago, after accounting for ₱1.6 billion in tax refunds. This marked its sixth consecutive month of double-digit growth.

Similarly, the BOC also posted a 3.2-percent increase in June collections, reaching ₱77 billion after deducting ₱1.9 billion in tax refunds. This was higher than last year’s ₱74.6 billion.

Meanwhile, non-tax revenues fell to ₱26.8 billion in June, down 43.3 percent from a year ago, mainly due to the high base from one-time remittances in 2024.

Government spending in June increased by 8.5 percent or ₱42.9 billion year-on-year to ₱548.5 billion, mainly driven by higher national tax allotment (NTA) shares for local government units (LGUs), the annual block grant to the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM), increased personnel expenses, and IPs.