Fiscal deficit eases despite higher spending – BTr

The National Government trimmed its budget deficit to P171.2 billion in February 2026, slightly lower than the P171.4 billion recorded a year earlier, as a sharp rise in revenues offset higher spending, according to the Bureau of the Treasury (BTr).

In a Tuesday statement, the BTr said government revenues surged 43.52 percent to P361.3 billion, driven largely by early dividend remittances and improved collections. Tax revenues accounted for the bulk at P249.8 billion, with the Bureau of Internal Revenue contributing P173.2 billion (up 8.51 percent) and the Bureau of Customs generating P73.7 billion (up 2.68 percent).

A narrower fiscal deficit means the government is relying less on borrowing. With greater fiscal space, authorities can provide more support to Filipinos affected by the economic impact of the ongoing Middle East conflict, including targeted subsidies, assistance to affected industries, and support for overseas Filipino workers, without significantly worsening the country’s debt position.

At the same time, a lower deficit reduces the risk of excessive spending that could fuel inflation — which rose to 4.1 percent in March — helping stabilize prices despite external shocks. Finance Secretary Frederick Go underscored the importance of the improved fiscal position as a buffer amid heightened risks and uncertainty stemming from the Middle East conflict.

“Our strong fiscal performance in February sets us up for a stable first quarter of this year. This acts as our safety net, giving us the resources to support the economy, especially during this time of uncertainty,” he said.

“This fiscal buffer allows us space to provide timely, targeted, and managed subsidies to help those most affected in our country by the Middle East event. This performance by the Department of Finance (DOF) and its attached agencies allows the government to maintain fiscal discipline and ensure a sustainable path in managing the current crisis,” added Go.

Meanwhile, non-tax revenues surged to P111.5 billion, more than six times last year’s level, boosted by higher income from the Treasury.

Expenditures rose 25.83 percent to P532.5 billion, which the BTr said reflected releases for local government shares, including the National Tax Allotment and BARMM block grants, as well as tobacco excise allocations.

For the first two months of the year, the fiscal deficit narrowed sharply to P5.8 billion, down 94.35 percent from P103.1 billion a year earlier, while revenues reached P830.2 billion, up 15.48 percent.