5-mo budget deficit swells to ₧523.9B By Reine Juvierre S. Alberto
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HE national government’s budget gap swelled to P523.9 billion in the first five months of the year, even if the fiscal deficit narrowed in May. Latest data from the Bureau of the Treasury (BTr) showed the government posted a lower budget deficit of P75.2 billion in May 2025, down by 33.93 percent yearon-year from P113.8 billion. The narrowed deficit is due to the 13.35 percent increase in revenue collections and 3.81 percent growth in expenditures during the national elections, according
to the Treasury. While the narrower May deficit is a positive sign, Philippine Institute for Development Studies (PIDS) senior research fellow John Paolo Rivera said this is “inadequate” to offset the cumulative deficit from earlier months. “This underscores the need for improved revenue collection, better tax administration, and more targeted spending,” Rivera said. “[The national government] must strike a careful balance between supporting growth and maintaining fiscal discipline, especially with global uncertainties and upcoming fiscal reforms on the horizon,” Rivera added.
The five-month deficit widened by 29.41 percent to P523.9 billion from P404.8 billion in the same period last year, as the government increased infrastructure investments and social programs to support growth. “[The national government] remains on track to meet its deficit target for the year through prudent fiscal management and efficient use of resources, in line with its Medium-Term Fiscal Program,” the Treasury said.
Increased revenue collection
BROKEN down, revenues grew by 5.41 percent to P1.953 trillion as of end-May from P1.853 trillion a
year ago. The bulk, or 89.71 percent, of the revenues came from taxes, while the remaining 10.29 percent are non-tax revenues. Tax revenues reached P1.752 trillion, with P1.353 trillion raised by the Bureau of Internal Revenue (BIR), P381.7 billion from the Bureau of Customs (BOC) and P17 billion from other offices. In May alone, the BIR’s revenue collection rose by 10.71 percent to P242.7 billion, driven by corporate income tax, personal income tax, excise tax on tobacco products, taxes on government securities and taxes on banks and financial See “5-mo,” A2
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TARIFFS, M.E. WARS CUT GROWTH GOAL TO 5.5-6.5% T
By Reine Juvierre S. Alberto @reine_alberto
ENSIONS in the Middle East, coupled with the imposition of tariffs by the United States, have prompted the Marcos Jr. administration to lower its growth targets for the year. GROWTH TARGET ADJUSTED AS EXTERNAL PRESSURES MOUNT New Target: 5.5%–6.5% Old Target: 6%–8%
WHY IT MATTERS: Slower global demand, escalating Middle East tensions, and new US tariffs are dragging down economic momentum. The lowered target signals a cautious outlook amid heightened external risks.
Exchange Rate: Peso estimated to remain at P56 to P58 per US dollar
In a press briefing on Thursday, the Cabinet-level Development Budget Coordination Committee (DBCC) trimmed the country’s growth target to 5.5 to 6.5 percent for 2025. This is lower than its earlier projection of 6 to 8 percent. “The revisions take into account heightened global uncertainties, such as the unforeseen escalation of tensions in the Middle East and the imposition of US tariffs,” DBCC Chairperson and Budget Secretary Amenah F. Pangandaman said. “Despite these headwinds, the
BUDGET & DEFICIT OUTLOOK
TRADE FORECASTS
2025 Budget: P6.793 trillion 7.4% from 2024
Projected Revenue (2025): P4.520 trillion
Goods Exports (2025): Contracting by 2% Down from 6% growth target
Expected Deficit: P1.561 trillion P37B than previous P1.524T
Projected Expenditure: P6.082 trillion
Goods Imports (2025): Growth: 3.5% Lower than earlier 5% estimate
“The government will prioritize maintaining price stability while expanding trade partnerships and enhancing the productivity of domestic industries.” —Budget Secretary Amenah Pangandaman
DBCC remains vigilant and ready to deploy timely and targeted measures to mitigate their potential impact on the Philippine economy. Moreover, international reserves remain ample, providing adequate buffer to help absorb these external shocks,” Pangandaman added. For 2026 to 2028, the DBCC also reduced the growth target to 6 to 7 percent from the initial 6 to 8 percent assumption. Pangandaman said the government will prioritize maintaining See “Tariffs,” A2
WORKFORCE CUTS RISE ACROSS BUSINESS SIZES IN 24–REPORT By Justine Xyrah Garcia
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ORE companies in the Philippines trimmed their workforce last year, with job cuts seen across all types of employment and business sizes, according to a new report by JobStreet by SEEK. In its 2025 Hiring, Compensation and Benefits Report, JobStreet reported that 43 percent of companies downsized in 2024—up from 24 percent in 2023. Permanent full-time employees made up the largest group affected at 28 percent, followed
BM Graphics: Ed Davad
2025 GDP Growth Target
by contractual full-time workers (23 percent), permanent parttime (22 percent), and contractual part-time (16 percent). “All types of businesses saw a similar increase in workforce reductions compared to the previous year. Small businesses had the highest reduction in permanent full-time employees, while medium-sized businesses reduced both permanent and contractual/ temporary full-time employees. Large businesses reduced employees across all categories,” the report noted. Small businesses, hiring up to See “Workforce,” A2
A+ FOR ADAPTABILITY Teachers gather at one of the newly established teacher hubs at Batasan National High School on Thursday, June 26, 2025. The school, now serving 12,864 students, has expanded its blended learning program—originally conducted in faculty rooms—to eight subject-specific classrooms, thanks to support from both national and local governments. The blended setup combines online and in-person classes to deliver all eight regular subjects amid continuing efforts to manage class size and optimize learning space. NONOY LACZA
‘Spending, investment to fuel Q2 growth’ By Bless Aubrey Ogerio
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ONSUMPTION and investment are expected to lift the Philippine economy to a 5.6-percent growth rate in the second quarter to keep the country on track to lead regional growth in 2025, HSBC Asean economist Aris Dacanay said in a media briefing. This marks a slight increase from the 5.4 percent growth recorded in the first quarter, but is significantly below the 6.3 percent posted in the same period in 2024. HSBC also revised its full-year growth forecast for the country to 5.4 percent, down from its earlier estimate of 5.6 percent. The adjustment was attributed to base effects, with last year’s relatively high growth affecting this year’s annual comparison. Despite the downgrade, the Philippines is
still expected to outperform several of its regional peers. Among major Southeast Asian economies, it is forecast to post the highest gross domestic product (GDP) growth in 2025, ahead of Vietnam (5.2 percent), Indonesia (4.5 percent), Malaysia (4.2 percent), Singapore (1.7 percent) and Thailand (1.7 percent). Dacanay explained that one of the factors supporting the Philippines’s resilience is its relatively low exposure to tariff-related risks, particularly in the US market. Philippine goods will face a 17-percent tariff, significantly lower than Vietnam’s 46 percent, Thailand’s 36 percent, Indonesia’s 32 percent and Malaysia’s 24 percent. Singapore, however, will enjoy the lowest tariff rate at 10 percent. For 2026, HSBC forecasted the nation’s GDP to expand by 5.8 percent, still ahead of most regional counterparts. Vietnam is expected to grow by 5.6 per-
cent, Indonesia by 5 percent, Malaysia by 3.9 percent, Thailand by 1.9 percent and Singapore by 1.6 percent. However, the government’s target for 2025 remains between 6 to 8 percent. The Department of Economy, Planning, and Development (DEPDev) earlier said that the economy would need to grow by 6.2 percent per quarter for the rest of the year to hit the lower end of the 6 to 8 percent growth target. Asked whether the government should adjust its targets in light of revised forecasts, Dacanay emphasized that the targets set by the Development Budget Coordination Committee (DBCC) are policy goals rather than forecasts. “The DBCC targets are targets, they’re not forecasts,” Dacanay told reporters. “For me, having a target of 6 percent, having a target based on the natural growth rate is what the government should always achieve.”
1.8% inflation for 2025
HSBC projected full-year inflation in the Philippines to average 1.8 percent in 2025. While this is higher than Singapore’s 1.1 percent and Thailand’s 0.2 percent, it remains lower than Vietnam (3 percent), Indonesia (1.9 percent) and Malaysia (1.9 percent). In May 2025, inflation slowed to 1.3 percent, the lowest rate since November 2019, according to the Philippine Statistics Authority. The decline was driven mainly by slower increases in housing, water, electricity, gas and fuel prices. Looking ahead to 2026, inflation is expected to rise to 2.7 percent—equal to Indonesia and still below Vietnam’s 3.2 percent. On one hand, Malaysia and Singapore are projected to have lower inflation at 1.7 percent and 1.3 percent, respectively. See “Spending,” A2
PESO EXCHANGE RATES n US 56.7230 n JAPAN 0.3908 n UK 77.5120 n HK 7.2265 n CHINA 7.9057 n SINGAPORE 44.3772 n AUSTRALIA 36.9040 n EU 66.1220 n KOREA 0.0417 n SAUDI ARABIA 15.1245 Source: BSP (June 26, 2025)