The country’s budget deficit rose by 26.56 percent to P76.7 billion as of February due to higher expenditures by the national government, data from the Bureau of the Treasury (BTr) showed Monday.

This was higher than the P60.6 billion recorded from January to February 2023. In February 2024, the budget deficit rose to P164 billion from the P106.4 billion seen in the same month last year.

Year-on-year, the BTr said the national government’s expenditures grew faster by 22.14 percent compared to its revenue growth of 5.73 percent. Its total expenditures last February jumped to P388.7 billion from P70.5 billion year-on-year.

On a year-to-date basis, this accumulated to P722.5 billion, up by 16.42 percent compared to the 2023 level.

The BTr said the national government increased disbursements to local government units as required by the rules on the National Tax Allotment and the Tobacco Excise Tax.

Similarly, the BTr said more funds were mobilized by the Department of Health and the Department of Social Welfare and Development to carry out their medical aid and poverty alleviation programs.

The BTr said that the national government also increased disbursements to the Department of Public Works and Highways amid the massive P9-trillion infrastructure development plan of the Marcos administration.

Primary expenditures, which excludes interest payments, rose by 20 percent to P340.9 billion.

Meanwhile, interest payments surged by 40.2 percent to P47.8 billion.

Revenues

Total revenues rose by 5.73 percent to P224 billion in February year-on-year, leading to a 15-percent growth to P645.8 billion in revenues year-to-date.

The Bureau of Internal Revenue contributed P138 billion, higher by 6.65 percent than the figure recorded in the same month last year.

The Bureau of Customs also increased collections by 12.19 percent to P70.6 billion during the period.

Meanwhile, the BTr grew its revenues by 1.56 percent due to higher dividend remittances and the national government’s share of the income from the Philippine Amusement and Gaming Corporation.

Collections from other government agencies dropped by 42.6 percent to P6.2 billion year-on-year as proceeds from the Malampaya Gas Field declined.

ING Philippines economist Nicholas Mapa said he expects the government to continue to spend a big portion of its budget on debt payments as the country’s debt-to-GDP ratio remains high at 60.2 percent.

The First Metro Investment Corporation projected steady government borrowings at P180 billion per month for this year.

Despite its huge borrowings, Jonathan Ravelas, senior adviser at Reyes Tacandong & Co. and former BDO Unibank Inc.’s chief market strategist, said the national government is now more prepared to navigate the inflationary effects on debt and to better strategize on borrowings to drive overall economic growth.

“The good thing about the risks is they are a repeat of 2022 and 2023. Of all the economic players, it’s only the government that has the propensity to spend due to the still high inflation,” he said.