Budget deficit narrows to P171.2 billion in February
By Justine Irish D. Tabile, Senior Reporter
THE NATIONAL Government’s (NG) budget deficit narrowed to P171.2 billion in February after revenue growth outpaced expenditures, the Bureau of Treasury said.
Data from the Treasury showed the budget deficit dipped by 0.14% to P171.2 billion in February from P171.4 billion in the same month a year ago.
Month on month, the budget balance swung to a deficit from the P165.4-billion surplus in January.
“The NG’s fiscal position improved in February 2026 with the budget deficit slightly down… as early remittance of dividends pushed revenue growth to 43.52% and helped offset expenditure expansion of 25.83%,” the BTr said.
Finance Secretary Frederick D. Go said that the 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. With tax and nontax revenues growing and expenditures kept targeted, we have successfully reduced our fiscal deficit,” he said in a statement on Tuesday.
“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,” he added.
Total revenue collections surged by 43.52% to P361.3 billion in February from P251.8 billion in the same month a year ago.
Tax revenues, which accounted for the bulk of collections, edged up by 6.59% to P249.8 billion in February from P234.3 billion in the same month in 2025.
The Bureau of Internal Revenue’s (BIR) collections rose by 8.51% to P173.2 billion in February from P159.7 billion a year ago. The Bureau of Customs’ (BoC) collections inched up by 2.68% to P73.7 billion in February from P71.8 billion last year.
“Apart from the BoC’s strengthened enforcement and compliance measures, the uptick in the bureau’s collection can also be attributed to the peso’s year-over-year depreciation,” the BTr said.
“As the dollar’s value increased by 0.3%, from P58.1 in February 2025 to P58.3 in February 2026, the cost of imported goods increased, driving up total collections,” it added.
Nontax revenues surged by 540.23% to P111.5 billion in February from P17.4 billion in the same month last year, as BTr revenues jumped by 1,104.24% to P95.4 billion and revenues from other offices increased by 70% to P16.2 billion.
The BTr said the surge in Treasury revenues reflected the earlier-than-usual remittance of 2025-earned dividends.
Meanwhile, NG expenditures jumped by 25.83% to P532.5 billion in February from P423.2 billion a year ago.
The Treasury said the increase was mainly due to the “spillover of the January National Tax Allotment and Bangsamoro Autonomous Region in Muslim Mindanao block grant release to early February,” as well as releases for the share of local government units in proceeds of the tobacco excise tax.
Primary expenditure (net of interest payments) went up by 29.04% to P483.6 billion in February from P374.8 billion in the same month last year.
Interest payments inched up by 1% to P48.9 billion in February from P48.4 billion a year ago.
TWO-MONTH DEFICIT
Data from the Treasury showed the fiscal gap narrowed by 94.35% to P5.8 billion in the January-to-February period from the P103.1-billion deficit last year, amid double-digit growth in overall collections and muted spending.
For the two-month period, total revenue collections rose by 15.48% to P830.2 billion from P718.9 billion recorded in the same period a year ago.
This represented 17.21% of the P4.82-trillion program approved by the Development Budget Coordination Committee (DBCC) at its 192nd meeting in December.
As of end-February, tax revenues jumped by 3.09% to P692.6 billion, as BIR collections went up by 3.33% to P531.9 billion and Customs collections inched up by 2.39% to P154.6 billion.
“The BIR’s steady improvement is a result of ongoing measures to boost taxpayer compliance nationwide,” the Treasury said.
Nontax revenues surged by 192.51% to P137.6 billion as of end-February, as BTr income jumped by 360.85% to P109.1 billion and other offices’ income increased by 22.02% to P28.5 billion.
For the two-month period, expenditures increased by 1.7% to P836 billion from P822 billion a year ago. This was already 12.99% of the P6.43-trillion disbursement program based on the DBCC meeting in December.
“The narrower budget deficit in February mainly reflects tighter spending control early in the year, alongside steady tax collections that helped offset higher interest costs,” Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion said in a Viber message.
“Looking ahead, deficit pressures could pick up as the government rolls out additional ayuda (aid) and support measures amid global energy risks, but these are likely to be managed within a broadly sustainable fiscal framework,” he added.
For the coming months, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said that he expects the deficit to widen as the government implements catch-up spending and rolls out subsidies for sectors most affected by soaring oil prices.
“Higher inflation and the US dollar/peso exchange rate could increase national expenditures, which would also widen the budget deficit but would be partly financed by more NG borrowings for the coming months,” he said in a Viber message.
