National Government spending accelerated by 19.82 percent in July to P588.6 billion, widening the monthly budget deficit to P106.3 billion as disbursements for key government programs and projects increased, according to the Bureau of the Treasury (BTr).

The Treasury said in a statement that the increase in spending was largely driven by social assistance programs under the Unified Package for Livelihood, Industry, Food, and Transport (UPLIFT) framework, which was created to help address the impact of the Middle East conflict. 

Higher disbursements also came from capital outlays under the Revised Armed Forces of the Philippines Modernization Program and direct payments from development partners for the Department of Transportation's foreign-assisted rail projects.

The BTr said the July deficit was significantly larger than the P18.9-billion shortfall recorded in the same month last year. For the first seven months of 2026, the budget gap reached P893.1 billion, up 13.85 percent, or P108.7 billion, from P784.4 billion in the comparable period in 2025.

Total disbursements from January to July reached P3.76 trillion, up 7.02 percent from P3.52 trillion a year earlier. Primary expenditures, excluding interest payments, rose 17.25 percent in July to P451.4 billion. On a year-to-date basis, primary expenditures reached P3.14 trillion, up 4.91 percent.

Interest payments also climbed 29.14 percent in July to P137.2 billion. The Treasury attributed the increase to coupon payments on additional domestic debt securities and global bonds, as well as foreign exchange movements affecting foreign-currency payments. Cumulative interest payments reached P620.9 billion, up from P521 billion a year earlier.

Government revenues, meanwhile, rose just 2.12 percent in July to P482.3 billion. Tax collections increased 7.02 percent to P452.7 billion, offsetting a 39.92-percent decline in non-tax revenues to P29.6 billion.

The Bureau of Internal Revenue collected P358.4 billion in July, up from P335.3 billion a year earlier, bringing its January-to-July collections to P1.99 trillion, 5.31 percent higher than a year earlier. The Bureau of Customs also posted a 7.48-percent increase in July collections to P91.6 billion, while its year-to-date collections reached P583.4 billion, up 7.25 percent.

The Treasury attributed the BOC’s growth to higher duties and VAT collections from imports, partly due to the stronger US dollar and higher crude oil prices, as well as improved customs procedures, border protection and digitalization.

Non-tax revenues declined in July mainly due to the timing of Bangko Sentral ng Pilipinas dividend remittances. The BSP remitted P59 billion in February and P3.4 billion in July, compared with P18.9 billion in July 2025. Cumulative non-tax revenues stood at P276.1 billion, slightly below P277 billion a year earlier.

Overall revenues reached P2.87 trillion from January to July, up 5.05 percent from P2.73 trillion a year earlier. Tax revenues accounted for P2.59 trillion, or 90.38 percent of total collections.

Excluding interest payments, the government recorded a P30.9-billion primary surplus in July, down 64.59 percent from a year earlier. The cumulative primary deficit widened to P272.2 billion from P263.4 billion.