Q1 budget shortfall markedly wider

THE government's budget deficit surged to P375.7 billion in March, the Bureau of the Treasury reported late on Tuesday, ballooning by 91.78 percent and 128.11 percent, respectively, from P159.9 billion and P164.7 billion a year and a month earlier.

It brought the first-quarter total to P478.8 billion, up 75.62 percent from the same period last year "but still in line with the P1.5-trillion deficit program for 2025," the Treasury said.

The Bureau of Internal Revenue, which accounted for the bulk of tax revenues in March, saw collections rise 20.86 percent to P157.7 billion. This brought its tally for January-March to P690.4 billion — 16.67 percent higher year on year.

The Bureau of Customs, meanwhile, posted a 7.3-percent rise to P80.4 billion from P74.9 billion for a first-quarter total of P231.4 billion, up 5.72 percent compared to January-March 2024.

Other offices recorded a 0.66-percent dip to P3.6 billion for a year-to-date total of P9.7 billion, down 0.11 percent as of end-March.

"The revenue agencies' sustained growth for the third consecutive month was driven by their ongoing revenue enhancement measures, particularly the intensified campaign against the use of fake receipts, intensified crackdown on illicit trade, digitalization and improvements in tax payment facilitation, among other initiatives," the Treasury said.

As for nontax revenues, the Treasury took in P8.7 billion, down a steep 83.32 percent from P49.1 billion a year ago. The result for the first quarter was P32.3 billion, also markedly down by 41.21 percent from P72.3 billion.

Other offices, which accounted for the bulk of nontax revenues, posted a 26.9-percent plunge to P10.9 billion for March from P15 billion for a year-to-date count of P34.2 billion — 16.5 percent lower than the year-ago P41.1 billion.

The Treasury blamed timing for the first-quarter plunge in nontax revenues, pointing out that 18 state-owned firms already remitted dividends for the first quarter last year, compared to just three in 2024.

"Nevertheless, nontax revenues are expected to improve in the succeeding months, with dividends from the GOCCs (government-owned and -controlled corporations) set to be remitted to the National Treasury starting May 2025," it added.

Spending, meanwhile, totaled P655 billion in March, 35.37 percent higher than the year-earlier P483.8 billion. Of this, interest payments accounted for P88.1 billion, up 24.21 percent, while others comprised the bulk at P586.9 billion, 37.9 percent higher.

Year to date, government expenditures rose to P1.477 trillion, 22.43 percent more than the P1.21 trillion seen in the first quarter of last year. Interest payments rose 24.88 percent to P241 billion while others increased 21.96 percent to P1.02 trillion.

Spending for January-March, the Treasury said was almost a quarter of the P6.2 trillion programmed for 2025 and also an improvement from the 20.36-percent share a year earlier.

"Consequently, the more balanced share of first-quarter expenditure in the current year corresponds to a level that is 22.43 percent (P270.6 billion) higher than last year's outturn," it added.

The increased spending was attributed to increased disbursements to the Department of Public Works and Highways, for road projects and operating requirements, and the Department of Social Welfare and Development for protective services.

Local governments also received transfers comprising their national tax allotment shares, the annual block grant to the Bangsamoro Autonomous Region in Muslim Mindanao and Local Government Support Fund releases.

The Coconut Farmers and Industry Trust Fund also received P32.8 billion under a mandated capitalization schedule.

Primary expenditures (net of interest payments) for the quarter totaled P 1.2 trillion, 21.96 percent more compared to a year ago.

The year-to-date primary deficit stood at P237.8 billion.

"With dividend remittances and other nontax receipts expected to materialize in the succeeding quarters, and as expenditures continue to track the full-year program in a more balanced manner, the 2025 fiscal deficit is projected to remain within the P1.5-trillion target," the Treasury said.