The government’s budget deficit ballooned by 461.7 percent to P106.3 billion in July from P18.9 billion last year as a sharp ramp-up in spending outpaced subdued revenue growth.
Total revenues modestly rose 2 percent to P482.3 billion from P472.3 billion.
Tax collections climbed 7 percent to P452.7 billion from P423 billion, while nontax revenues contracted by 40 percent to P29.6 billion from P49.3 billion.
Meanwhile, expenditures jumped nearly 20 percent to P588.6 billion from P491.2 billion amid the implementation of the Unified Package for Livelihood, Industry, Food, and Transport framework, as well as higher disbursements for defense modernization and foreign-assisted rail projects.
From January to July, the fiscal shortfall now stands at P893.1 billion, equivalent to 53.9 percent of the government’s full-year ceiling of P1.658 trillion.
The jump in expenditures, however, did not extend to infrastructure.
Infra spending
A year into the fallout from the flood control corruption scandal, government infrastructure spending continued to slump after falling by 40 percent in the first half of 2026.
Latest data from the Department of Budget and Management (DBM) showed infrastructure and other capital outlays plunged 40.8 percent to P367.4 billion from January to June, from P620.2 billion in the same period last year.
This was equivalent to only 39 percent of the P931.54-billion program for the period.
Including equity and capital transfers to local government units, total infrastructure-related spending reached P548.3 billion, down 26.3 percent from P743.6 billion a year earlier.
This was also less than half of the revised P1.272-trillion program.
Spending in June alone fell 34 percent to P98 billion from P148.8 billion a year earlier.
‘The decline in year-on-year spending partly reflected the implementation of strengthened review, audit, validation, and documentary safeguards intended to ensure that government payments are made only for properly verified and compliant infrastructure works,’ DBM said.
Recovery
The DBM is now eyeing a recovery in infrastructure spending in the third quarter on the back of higher DPWH allotments.
‘We are not proposing any relaxation of safeguards. In fact, we want more safeguards. What we are looking at is how we can hasten implementation and procurement,’ DBM Acting Secretary Kim Robert De Leon said on Thursday.