Marcos admin to stick to deficit targets

The Marcos administration will stick to the fiscal deficit targets, Finance Secretary Frederick D. Go said, while analysts warned this may be more challenging amid expectations of weaker revenue collection.

Asked if the government tweaked its deficit ceilings, Mr. Go on Friday told reporters no changes were made to the targets.

The government set the deficit ceiling at PHP 1.65 trillion or 5.3% of gross domestic product for 2026. For 2027, the deficit ceiling was set at PHP 1.6 trillion or 4.8% of GDP, followed by PHP 1.55 trillion or 4.3% of GDP by 2028.

The Development Budget Coordination Committee has trimmed the targets of the revenue-generating agencies this year, potentially affecting fiscal consolidation efforts.

The Bureau of Internal Revenue’s (BIR) revenue collection target was cut by 4.14% to PHP 3.431 trillion this year, while the Bureau of Customs’ (BoC) target was trimmed by 1.07% to PHP 1.003 trillion.

The BTr’s cash operations report, which includes the December and full-year fiscal deficit figures, will be released on March 3.

In the first 11 months, the budget deficit widened to PHP 1.26 trillion, about 80.92% of the PHP 1.56-trillion full-year 2025 target.

Meanwhile, analysts warned that weak revenue collections from the BIR and BoC could make it more difficult for the administration to keep the 2026 deficit within target.

Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said cutting the BIR and BoC’s collection goals by around PHP 160 billion makes it more difficult to bring down the deficit to 5.3% of GDP.

“It basically means the government has less revenue cushion, so if spending isn’t tightened or offsetting revenues don’t materialize, the deficit will widen,” he said in a Viber message on Sunday. 

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the government’s 5.3% fiscal deficit target for 2026 will be “challenging to achieve” amid lower projected revenue collections.

Pressures such as slower economic activity, geopolitical risks, and local political noise could dampen tax receipts and widen the budget gap, he said in a Viber message over the weekend.

Privatization 

Meanwhile, Mr. Go said he has directed the Privatization and Management Office (PMO) to look at government assets based on what is more “realistic” to sell.

“I asked them to get back to me to arrange it according to what they believe is more realistic,” the Finance chief added.

Based on the 2026 Budget of Expenditures and Sources of Financing, proceeds from the government’s privatization program are expected to surge to PHP 101 billion in 2026 from PHP 5 billion last year. — Aubrey Rose A. Inosante