NG budget deficit shrinks to P157.6 billion in November

THE NATIONAL Government’s (NG) budget deficit sharply narrowed in November as expenditures contracted for a fourth month in a row, and revenue growth remained sluggish amid a corruption scandal.

Data from the Bureau of the Treasury (BTr) showed the budget deficit shrank by 26.02% to P157.6 billion in November from P213 billion in the same month a year ago.

This was a reversal of the P11.2-billion surplus in October.

In November, government spending declined by 9.61% to P498.3 billion from P551.3 billion in the same month last year.

Primary expenditure (net of interest payments) dropped by 13.13% to P421 billion in November, while interest payments went up by 15.95% to P77.3 billion.

November marked the fourth straight month that expenditures fell on an annual basis, since the 0.74% contraction in August after a corruption scandal involving flood control projects was made public.   

The scandal has dampened economic activity and public spending, particularly on infrastructure, and put pressure on revenue collections.

Total revenue collections inched up by 0.72% to P340.7 billion in November from P338.3 billion in the same month last year.

Tax revenues, which accounted for the bulk of collections, edged up by 2.81% to P331.4 billion in November from P322.4 billion in the same month in 2024.

The Bureau of Internal Revenue’s (BIR) collections rose by 2.7% to P254.3 billion in November from P247.6 billion a year ago.

Collections of the Bureau of Customs (BoC) rose by 3.35% to P74.9 billion in November from P72.4 billion a year ago.

On the other hand, nontax revenues fell by 41.58% to P9.3 billion in November from P15.9 billion in the same month last year, “mainly due to the absence of the one-off remittances last year.”

BTr revenues dropped by 29.3% to P5.6 billion in November, while revenues from other offices slid by 53.79% to P3.7 billion.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the narrower deficit was mainly due to reduced government spending.

“(This) could signal more disciplined spending amid anti-corruption measures and other reforms to improve governance standards in view of the anomalous flood control projects that reduced government spending as an immediate reaction to prevent the risk of corruption,” he said in a Viber message.

11-MONTH DEFICIT
In the January-to-November period, the budget deficit widened to P1.26 trillion from the P1.18-billion deficit last year, amid single-digit growth in spending and revenue collection.

“The overall fiscal deficit stands only at 80.92% of the FY (fiscal year) 2025 revised full-year target of P1.56 trillion, reflecting the government’s commitment to prudent fiscal management and consolidation efforts,” the Treasury said.

For the 11-month period, expenditures stood at P5.41 trillion, 2.49% up from P5.28 trillion a year ago. This was already 89% of the P6.08-trillion full-year expenditure program.

Primary expenditures inched up by 0.8% to P4.61 trillion as of end-November, while interest payments increased by 13.49% to P801 billion.

Meanwhile, total revenue collections for the January-to-November period rose by 1.09% to P4.15 trillion from P4.1 trillion a year earlier.

This represented 91.79% of the revised full-year program of P4.52 trillion.

“Growth for the period was driven by a 7.03% (P249.5-billion) year-on-year increase in tax collections, which more than offset the P204.6-billion contraction in nontax sources due to the base effect of one-off windfall receipts in 2024,” the BTr said.

In the 11-month period, tax revenues jumped by 7.03% to P3.8 trillion, which is 90.14% of the P4.21-trillion target.

BIR collections went up by 8.92% to P2.91 trillion as of end-November, already accounting for 90.25% of its P3.22-trillion full-year target.

Customs collected P859.5 billion in the 11-month period, up by 1.12% from a year ago. This was 89.65% of the revised P958.7-billion program for the year.

Nontax revenues fell by 36.85% to P350.6 billion as of end-November.

“Nonetheless, the January-to-November 2025 sum already exceeded the adjusted FY 2025 program of P306.5 billion by 14.4% (P44.1 billion), supported by the better-than-expected performance of the Bureau of the Treasury income and collections from other offices including privatization proceeds, fees and charges, and grants against their respective full-year target,” the Treasury said.

BTr income slid by 7.52% to P215.2 billion as of end-November, while other offices’ income slumped by 58.01% to P135.4 billion.

The primary deficit — net of interest costs — shrank by 1.77% to P463.2 billion in the 11 months from just P471.5 billion a year earlier.

“The decline for the period can be partly attributed to temporary delays in the implementation of some flood control projects amid ongoing investigations related to alleged corruption issues,” the BTr said. 

Mr. Ricafort said there is a “good chance” the government will hit the P1.56-trillion deficit ceiling this year, citing fiscal and tax reforms and anti‑corruption efforts to boost revenues and curb wastage.

In the coming months, he said that stricter anti‑corruption measures could slow government spending, but this would help narrow the deficit and reduce borrowing needs. — Aubrey Rose A. Inosante