Spending Juan dela Cruz’s money
Given the large debt stock, increased interest payments could have driven up the budget deficit, especially with the government borrowing extensively to finance its programs.
Daily TribuneGiven the large debt stock, increased interest payments could have driven up the budget deficit, especially with the government borrowing extensively to finance its programs.
The Bureau of the Treasury reported a P67.3-billion budget surplus for April 2025, a figure that initially sounds impressive and suggests a healthy fiscal position for the government.
This budget surplus might indicate effective revenue collection and prudent spending by the national government, offering hope that the Philippine economy is on a robust footing.
Such a surplus, indeed, appears to be a sign of fiscal discipline and economic stability, that is, that the administration is capable of managing public funds effectively, allowing for increased investments in social services, infrastructure, debt reduction, and the like.
The surplus could very well bolster confidence among investors and the general public, but a deeper analysis paints a troubling picture, particularly when one considers that in just four months of the year, the national government has accumulated a staggering deficit totaling P411.5 billion.
Simply said, the sizable deficit ramped up by the government within the first four months means that the government is spending far more than it is earning.
This sharp discrepancy signals underlying issues — possibly unplanned expenditures, revenue shortfalls, or a combination of both, contributing to the early-year financial imbalance.
Persistent deficits threaten long-term fiscal sustainability, risking higher borrowing costs and future financial burdens for taxpayers.
The contradiction between a monthly surplus and an overall deficit reflects the complexity of fiscal management.
It raises critical questions about how public funds are being allocated, whether strategic borrowing is being used responsibly, and if revenue collection strategies are effective amid the current economic environment.
Moreover, a mounting deficit amidst global economic uncertainties can hinder the government’s ability to respond to future crises or unforeseen expenses. It underscores the importance of transparency, accountability, and prudent fiscal planning within the Marcos Jr. administration.
In conclusion, while the April surplus might momentarily boost confidence, the significant cumulative deficit underscores ongoing fiscal challenges. It calls for more scrutinized policies and better management of public funds to ensure that short-term gains do not translate to long-term fiscal instability. How the government addresses this troubling trend will be crucial in shaping the country’s economic resilience in the years ahead.
Some likely reasons behind the substantial deficit aforementioned would include an increase in outlays for social services, health, pandemic recovery efforts, or infrastructure spending to stimulate economic growth, leading to higher expenditures.
We could also include current global economic conditions, inflation, rising interest rates, and external shocks as causes for reductions in exports and foreign investments, which altogether affect government revenues.
Fluctuations in oil and commodity prices and the external trade situation also impact adversely on the economy. For instance, data from the Philippine Statistics Authority show that of total external trade in March this year, 62 percent were imported goods, while the remaining 38 percent were exported goods.
Total outstanding Philippine government debt reached P16.05 trillion as of end-2024, or a 9.8-percent increase (P1.44 trillion) from the end of 2023. This increase is primarily attributed to the net issuance of debt instruments and the valuation effect of the US dollar strengthening against the Philippine peso.
Given the large debt stock, increased interest payments could have driven up the budget deficit, especially with the government borrowing extensively to finance its programs. Restructuring or refinancing existing debt could very well have incurred additional costs in early 2025.
Other factors costing the government are natural disasters with the agricultural sector alone suffering damage estimated at P463 billion in 2024. Cumulatively, these reasons are among the major fiscal challenges faced by the government.
It should be stated here that there is nothing wrong with a government spending xxx amounts of pesos, provided these funds are used to satisfy the public good and there is transparency in how this is used to ensure public trust and accountability.
The people should be informed — nay, they must demand — information on how their hard-earned monies are allocated, spent, and managed. They must be assured of responsible government spending — for infrastructure, social services, health, education, and the like.
Ultimately, along with transparency, what is crucial is that government expenditures translate to long-term growth and revenue measures are effectively implemented by the Marcos Jr. administration to balance the fiscal picture moving forward.