The government’s budget deficit narrowed by 34.4 percent to P18.9 billion in July 2025 from P28.8 billion recorded in the same month last year, the Bureau of the Treasury (BTr) said Thursday.
The BTr attributed the lower deficit to a faster increase in government revenues, which grew by 3.26 percent year-on-year, outpacing the 1.02 percent growth in spending.
It said that in the first seven months of the year, the total fiscal deficit reached P784.4 billion, well within the government’s revised full-year target of P1.56 trillion.
Government revenues in July rose to P472.3 billion, driven by higher tax collections from the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC). The BIR collected P335.3 billion, up 4.83 percent year-on-year, while the BOC collected P85.2 billion, reflecting a 6-percent increase.
The BIR’s strong performance was boosted by higher corporate income tax revenues, followed by personal income tax, tax on government securities, excise tax on tobacco products, percentage tax on banks and financial institutions and documentary stamp tax.
The BOC’s positive performance was supported by a 6.13-percent year-on-year increase in value-added tax and a 12.69 percent rise in excise collections.
Non-tax revenues contributed P49.3 billion in July, a decrease of 9.66 percent from the previous year. This was offset by a strong BTr income of P36.3 billion, which surged 82.42 percent year-on-year amid strong dividend remittances, interest income on government deposits and the government’s share from the Manila International Airport Authority’s profit.
Seven-month revenues expanded to P2.73 trillion, or 60.4 percent of the revised full-year program of P4.52 trillion. Tax revenues made up the majority at P2.45 trillion, a 9.71 percent increase from the previous year.
Meanwhile, non-tax revenues totaling P277 billion contracted by 24.88 percent year-on-year, largely due to the base effect of non-recurring large remittances in 2024.
National government disbursements expanded to P491.2 billion in July 2025 from P486.2 billion a year ago. This was driven in part by higher National Tax Allotment releases to local government units (LGUs), the Annual Block Grant to the Bangsamoro Autonomous Region in Muslim Mindanao, interest payments and personnel services expenditures.
Spending in July was weighed down by the timing of big-ticket disbursements from the Department of Public Works and Highways, the Department of Social Welfare and Development and the Department of National Defense for their respective programs.
Cumulative disbursements as of end-July reached P3.52 trillion, an 8.22 percent increase year-on-year, representing 57.82 percent of the P6.08 trillion revised full-year 2025 program.
The Treasury said of the seven-month expenditure, P3 trillion went to primary expenditures, which grew by 7.26 percent year-on-year. The remaining P521.0 billion, which went to interest payments, went up 14.10 percent from a year ago.
