Report: Govt budget gap widens by 22% in 7 mos By Reine Juvierre S. Alberto
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HE national government’s budget deficit in July may have narrowed, but the gap still widened by more than a fifth in seven months. Latest data from the Bureau of the Treasury (BTr) showed the budget deficit from January to July this year reached P784.4 billion, higher by 22.04 percent from P642.8 billion in the same period last year. The Treasury said the cumulative fiscal deficit during the 7-month period is “well within” the P1.561-trillion revised fullyear deficit target.
“While the gap appears sizeable, it remains within the expected trajectory under the fiscal program. However, it signals the need to ensure that spending is productive and growth-enhancing,” John Paolo Rivera, senior research fellow at the Philippine Institute for Development Studies, told BusinessMirror. A budget deficit occurs when government spending exceeds the revenues it collects. A wider budget deficit could mean greater borrowing needs for the government to finance its spending requirements. Rivera said a key issue is not just the size of the deficit, but the composition of the government’s
spending. “If public expenditures are largely directed toward infrastructure, human capital, and digital transformation, then they serve as investments for long-term growth. If not, it raises concerns on fiscal efficiency,” he said. Data showed government spending amounted to P3.516 trillion as of end-July, while revenues collected totaled P2.732 trillion. Broken down, revenue collection reached P2.732 trillion as of end-July. This was 4.82 percent higher than the P2.606 trillion posted a year ago. The Bureau of Internal Revenue (BIR) posted a 12.34-percent yearon-year increase in its tax collec-
tions, generating P1.889 trillion. The Bureau of Customs’ (BOC) collections, meanwhile, marginally grew by 1.51 percent to P544 billion as of end-July from last year’s P535.9 billion. As for non-tax revenue collections, this fell by 24.88 percent to P277 billion as of end-July from P368.8 billion a year ago. Meanwhile, government spending rose by 8.22 percent to P3.516 trillion in January to July, compared with P3.249 trillion recorded in the same period in 2024. Interest payments jumped by 14.10 percent year-on-year to P521 billion as of end-July, while other expenditures grew by 7.26 See “Report,” A2
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BSP BRINGS KEY RATES TO ‘GOLDILOCKS’ ZONE www.businessmirror.com.ph
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By Cai U. Ordinario @caiordinario
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HE Bangko Sentral ng Pilipinas (BSP) may have ushered policy rates into the “Goldilocks” zone with its latest action, but the Monetary Board is still open to at least one more rate cut this year. The BSP Monetary Board announced Thursday that it has reduced the Target Reverse Repurchase (RRP) Rate by 25 basis points to 5 percent. The interest rates on the overnight deposit and lending facilities were adjusted to 4.5 percent and 5.5 percent, respectively. BSP Governor and MB Chairman Eli M. Remolona Jr. said in a press briefing that the 5-percent interest rate is the “Goldilocks” rate as it is “neither too high nor too low.” “Based on the latest data, I think this puts us at our sweet spot for both inflation and output. The projected inflation rate over the next year or so is where we want it to be. See “BSP,” A2
WAITING AMID RISING TIDES Passengers await the return of ferries from the Talim Island Group, while fishermen take advantage of the high tide to catch tilapia. Rainclouds loom on the horizon at the Pritil Binangonan fish port and
passenger terminal. BERNARD TESTA
HEAVY RAINS MAY DAMPEN HOLIDAYS IN SOME REGIONS By Bless Aubrey Ogerio
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HE Philippine Atmospheric, Geophysical and Astronomical Services Administration (Pagasa) has formally issued a La Niña Watch, saying that more than half of the indicators point to the development of a weak or short-lived La Niña condition this year. Ana Liza Solis, chief of Pagasa’s Climate Monitoring and Prediction Section, said the likelihood of La Niña forming in
the coming months is currently between 53 and 58 percent— higher than the climatological average of about 30 percent for this time of year. “While it’s not expected to develop into a full-blown La Niña lasting six months or longer, we are seeing conditions that could still bring significant rainfall,” Solis said in a mix of English and Filipino during a media forum on Wednesday. Solis noted that certain areas may experience above-average rain as early as September, inSee “Heavy,” A2
Peza still optimistic about hitting 2025 target By Andrea E. San Juan
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XPANDED regional engagements will help the country’s economic zones secure as much as P300 billion worth of investments this year, according to the Philippine Economic Zone Authority (Peza). “What we’re seeing now is still a healthy, robust pipeline of projects—and with our expanded regional engagements, we expect strong growth momentum in the months ahead,” Peza Director General Tereso O. Panga said in a statement on Thursday. Panga made the pronouncement after Peza announced that it greenlit 179 projects worth P105.83 billion in January to August.
This is 71.54 percent higher than the P61.69 billion the agency approved a year ago. These projects are expected to generate 40,638 direct jobs, Peza also noted, adding that exports from these investments could amount to $3.38 billion. “With the volume of interest we are receiving, and the quality of projects in our pipeline, we are confident that the coming months will not just achieve our target for the year but also bring even greater gains for our economy and our people,” Panga said. In a Viber message sent to the BusinessMirror on Thursday, the Peza chief said the agency is still gunning for as high as P300 billion in investments this year. “Low target at P235 billion to P250
billion versus high target at P300 billion,” Panga told this newspaper. In terms of sectors, 82 of the projects are into manufacturing; 46, IT-BPM; 17, domestic; 13, facilities; 12 ecozone development; and 5 logistics and 4 utilities. As to the source of investments, Cayman Islands led the pack, followed by South Korea, Chinese, American, and Dutch investors. Per region, 147 of the approved projects are expected to locate in Luzon, 25 in Visayas and 7 in Mindanao. In the month of August alone, Peza approved 29 new and expansion projects worth P14.872 billion, which represents an 8-percent dip. Peza said this is because the Board held two meetings in August 2024. “This occurrence is common especially as Peza is mandated to
convene as necessary to ensure that projects move forward without delay.” In a Viber message sent to this paper recently, Panga said Peza is “aggressively” engaging with the local government units (LGUs) to push for an ecozone program to attract investments into their jurisdictions. “We see more domestic market oriented projects locating in the ecozones. The biggest come-on is our growing domestic market and increasing purchasing power with our growing middle class.” Peza revealed recently that 10 LGUs manifested their intent to establish an ecozone in their respective areas for the first time. (See: https:// businessmirror.com. ph/2025/08/26/ecozones-newboon-for-lgus-says-peza/)
PESO EXCHANGE RATES n US 57.1080 n JAPAN 0.3875 n UK 77.0958 n HK 7.3350 n CHINA 7.9871 n SINGAPORE 44.4213 n AUSTRALIA 37.1202 n EU 66.4680 n KOREA 0.0410 n SAUDI ARABIA 15.2195 Source: BSP (August 28, 2025)