The Philippine government’s fiscal performance remained firmly on track in the first half of 2026, buoyed by robust tax collections and disciplined spending, allowing the national budget deficit to come in slightly below target despite higher expenditures.
Data released by the Bureau of the Treasury (BTr) showed that the national government’s budget deficit reached PHP786.8 billion from January to June 2026. While this was marginally higher than the PHP765.5 billion recorded during the same period last year, it was 0.17 percent lower than the government’s programmed deficit of PHP788.2 billion for the period—a sign that fiscal management remains aligned with the country’s economic targets.
The latest figures reflect the government’s continuing efforts to strengthen revenue generation while supporting key development priorities and public spending programs.
National government revenues rose by 5.67 percent year-on-year to PHP2.39 trillion in the first six months of the year, compared with PHP2.26 trillion collected in the same period in 2025. Tax revenues accounted for the lion’s share of collections, reaching PHP2.14 trillion, or 5.38 percent higher than last year’s level.
The Bureau of Internal Revenue (BIR) remained the government’s biggest revenue contributor, collecting PHP1.63 trillion during the period, up from PHP1.55 trillion a year ago. The increase was driven by stronger collections from corporate and personal income taxes, value-added tax (VAT), percentage taxes, and other miscellaneous tax sources.
Meanwhile, the Bureau of Customs (BOC) posted an impressive performance, generating PHP491.9 billion in revenues during the first half—7.21 percent higher than the PHP458.8 billion recorded in the same period last year. The agency also exceeded its collection target of PHP484.8 billion.
The BTr attributed the Customs’ revenue growth largely to stronger VAT collections, supported by higher oil prices. These gains helped offset a decline in excise tax collections, which fell by 2.73 percent amid lower oil import volumes and the government’s temporary suspension of excise taxes on liquefied petroleum gas (LPG) and kerosene.
Non-tax revenues likewise contributed positively to the government’s fiscal position, reaching PHP246.5 billion. The amount surpassed both the PHP227.7 billion generated in the first half of 2025 and the PHP230.2 billion programmed for the period.
Government spending, on the other hand, continued to accelerate as the administration ramped up investments in public services and infrastructure. Total expenditures climbed by 4.94 percent to PHP3.18 trillion, compared with PHP3.03 trillion recorded in the same period last year.
For June alone, national government revenues reached PHP314.5 billion, reflecting a 2.46 percent increase year-on-year. Tax collections remained the primary driver, led by the BIR’s PHP210.7 billion haul—5.07 percent higher than last year’s level. The agency attributed the increase to intensified tax administration and enforcement efforts, modernization initiatives, and improved taxpayer compliance.
The BOC also sustained its growth momentum in June, collecting PHP86.2 billion, up by 11.88 percent from the same month last year.
Government expenditures in June expanded by 5.51 percent to PHP578.7 billion, driven by larger National Tax Allotment shares for local government units, subsidy releases to government-owned and controlled corporations—including funding for the Food Terminal Incorporated’s Rice-for-All Program—and direct payments made by development partners for foreign-assisted rail transport projects under the Department of Transportation.
Despite higher spending requirements, the government’s fiscal position remains within program targets, underscoring the administration’s commitment to balancing economic growth initiatives with prudent fiscal management.
Finance Secretary Frederick Go expressed confidence that revenue targets for the remainder of the year will be met, citing the continued performance of the country’s revenue-generating agencies.
“The Department of Finance is confident about the abilities of our revenue-generating agencies to be able to meet their targets for the second half of the year,” Go said on the sidelines of the signing of a joint administrative order prohibiting the importation of goods produced through forced labor.
With revenue collections continuing to improve and spending aligned with key national priorities, the government’s first-half fiscal results provide a positive signal that the Philippines remains on track to achieve its broader economic and fiscal objectives for 2026.
