Gov’t posted smaller fiscal surplus in January 2025

MANILA, Philippines – The Marcos administration’s fiscal balance tilted to a surplus in January, although the windfall was smaller compared with 2024 as government spending sustained a robust growth ahead of the midterm elections.

The government recorded a budget surplus of P68.4 billion in the first month of 2025, a turnaround from the P329.5-billion deficit in December 2024, according to the latest cash operations report of the Bureau of the Treasury (BTr) released on Monday.

That the government posted a fiscal surplus means it collected more revenues than it spent during the period. But data showed the January surfeit was 22.27 percent smaller than the P88 billion excess in the same month last year.

READ: Philippine government deficit declined but exceeded limit in 2024

Dissecting the Treasury’s report, the government had generated P467.1 billion revenues in January, up by 10.75 percent. Taxes, which accounted for 93.66 percent of the total receipts, had jumped by 13.60 percent to P437.5 billion.

The Bureau of Internal Revenue (BIR) generated P355.1 billion, marking a 15.13-percent growth on the back of higher receipts from value-added tax and income taxes, among others. The Treasury also attributed this performance to the BIR’s “intensified collection efforts, aggressive illicit trade campaigns and digital transformation projects.”

Meanwhile, the Bureau of Customs’ (BOC) modernization program helped it raise P79.3 billion in January, up by 7.98 percent. Notably, VAT receipts had surged by 17.55 percent to P7.7 billion, while excise collections had grown by 10.10 percent to P1.8 billion, helping offset the reduction in duty collections due to lower tariffs on rice imports.

Nontax revenues however had fallen by 19.16 percent to P29.6 billion, largely due to the base effect of one-time gains recorded in the year prior.

Spending up

Overall, the amount of revenues collected in January had exceeded cash outflows from expenditures, which had risen by 19.45 percent to P398.8 billion.

The BTr attributed the spending growth to payments for completed infrastructure projects and various health and social protection programs.

But notably, expenses of the Commission on Elections to prepare for the May midterm polls also contributed to the higher disbursements.

For this year, the Marcos administration—which is targeting an “A” credit rating within its term —has set a fiscal deficit ceiling of P1.537 trillion, which is equivalent to 5.3 percent of gross domestic product.

To bridge the fiscal gap, the government is planning to borrow P2.55 trillion from creditors at home and abroad.