The national government recorded higher revenues in the first nine months of 2025, keeping the budget deficit below target as tax collections continued to rise, the Bureau of the Treasury (BTr) reported Thursday.

In its latest cash operations report, the Treasury said total revenue collections reached P3.37 trillion from January to September, up 2.24 percent from P3.30 trillion a year ago.

Revenue collections refer to the money the government earns from taxes and other sources such as fees and dividends.

“This makes revenue performance on track to hit the full-year program of P4.52 trillion,” the BTr said.

Tax revenues lead growth

Tax revenues made up most of the total, reaching P3.05 trillion, an 8.56 percent increase year-on-year.

The Bureau of Internal Revenue (BIR) collected P2.32 trillion, up 10.8 percent, boosted by higher payments from income and value-added taxes as well as excise taxes on tobacco.

The BIR collects national taxes such as income and VAT.

The Bureau of Customs (BOC), which collects taxes on imports, brought in P701.7 billion, up 1.59 percent.

Non-tax revenues, such as dividends, fees, and income from state investments, amounted to P314.1 billion, down 34.71 percent due to one-time remittances received in 2024. Still, this figure exceeded the full-year target of P306.5 billion, supported by earnings from PAGCOR, MIAA, and Treasury investments.

Deficit below target

The government’s fiscal deficit stood at P1.12 trillion, below the P1.26 trillion target for the period.

A fiscal deficit occurs when government spending exceeds its revenues.

“The deficit is expected to remain within the full-year target of P1.56 trillion by year-end, underscoring the government’s firm commitment to fiscal discipline while maintaining strong support for economic growth and priority development programs,” the BTr said.

Government spending steady

Public spending reached P4.48 trillion as of September, up 5.18 percent year-on-year.

Government spending refers to money used for infrastructure, public services, and debt payments.

The Treasury noted that disbursements slowed in September because of project implementation issues at the Department of Public Works and Highways (DPWH), possibly due to the anomalous flood control project scandal.

“While some Department of Public Works and Highways (DPWH) projects faced implementation challenges, the government has in place catch-up measures to keep overall spending aligned with the government’s priorities and ensure that expenditures continue to drive economic growth,” the BTr said.

Increased interest payments, as well as tax allotments for local governments, partly offset the slowdown.