PhilStar 58, Revenue expansion and spending control

Revenue expansion and spending control

ENERGY, INFRA AND ECONOMICS - Bienvenido Oplas Jr. - The Philippine Star 

September 4, 2025 | 12:00am

https://www.philstar.com/business/2025/09/04/2470244/revenue-expansion-and-spending-control-oplas

 

Last week, the Bureau of the Treasury released the Cash Operations Report (COR) for July 2025. Here, I compare the total for January-July 2023, 2024 and 2025, respectively. All units in billion pesos:

 

Total revenues: 2,271.9, 2,606.9 and 2,732.5, or an increase of only 125.6 in 2025. The Bureau of Internal Revenue (BIR) has collected 1,492.3, 1,681.8 and 1,889.4, or an increase of 207.6 in 2025.

 

The Bureau of Customs (BOC) underperformed with collections of 506.5, 535.9 and 544.0, or an increase of only 8.1. Big underperformance in January-June 2025, but last July, BOC collected 85.2 versus an average of only 76/month in April-June. So new BOC Commissioner Ariel Nepomuceno has delivered in his first month in office. Congratulations Commissioner Nepomuceno, keep it going.

 

The non-tax revenues suffered a big decline: 255.3, 368.7 and 277.0, or a decline of 91.7 this year. This is because “other non-tax” like remittances by government corporations have significantly expanded in 2024 and not able to sustain it this year: 63.0, 143.6 and 73.7, a decline of 69.9.

 

Expenditures have increased faster: 2,871.4, 3,249.7 and 3,516.9, or an increase of 267.2 this year. The expansion came mainly from national government disbursements: 1,859.0, 2,100.0 and 2,229.5, or an increase of 130.0 this year. The allotment to local government units have increased too: 538.2, 590.4 and 670.0, or an increase this year of 79.3.

 

Interest payment alone of our high public debt keeps increasing too: 346.0, 456.7 and 521.0, or an increase of 64.4 this year. Our interest payment excluding principal amortization in the first seven months of 2025 was 2.5/day, that is big.

 

Faster expansion in expenditures and slower expansion in revenues means the budget deficit has expanded too: 599.5, 642.8 and 784.4, or an increase of 141.7 this year.

 

Higher deficit means higher financing or borrowing needed: 928.6, 851.9 and 1,402.5, an increase this year of 550.6. We keep borrowing high, the expenditures and subsidies remain high, even without any economic or finance or virus crisis.

 

That is one indicator of fiscal irresponsibility by many agencies, the Department of Public Works and Highways (DPWH) being on spotlight because of hundreds of billions of pesos lost yearly due to wastage if not outright corruption and stealing.

 

See this report from The Philippine Star: “P118.5 billion a year lost to flood control corruption – DOF” (Sept. 3). It quoted there Finance Secretary Ralph Recto at the Development Budget Coordination Committee (DBCC) briefing at the Senate, stating in disappointment, “Raising revenues is no joke. Then you will see that it does not go to the right projects and the welfare of the people. Some even become non-existent. Because of ghost projects, our economy has lost P42.3 billion to P118.5 billion… Maybe if that money was spent better, we could have reached six percent growth.”

 

Yes, raising more revenues is a lot more tiring than raising spending and subsidies. During the budget call for 2026, Department of Budget and Management (DBM) Secretary Amenah Pangandaman said that DBM received P10.1 trillion in total spending request from all agencies. Horrible. The total budget this year is only P6.3 trillion and agencies requested nearly P4 trillion increase in just one year.

 

Philippines’ “deep state” at work, spend-spend-spend without regards for the adverse fiscal impact like the big jump in the deficit, in borrowings and in debt payment both principal and interest. And it is not only in DPWH but in many agencies, both national and local. So DBM and the rest of the economic team disallowed many budget expansion request and submitted a total of P6.8 trillion to Congress for 2026.

 

My short notes on the ongoing DPWH corruption scandals.

 

One, the term “flood control” is wrong because no one can control flood, control rains, control lava flows, etc. They go with gravity. The appropriate term should be “flood facilitation.”

 

Two, creeks, rivers and lakes should have regular dredging to make them deeper and hold more water during flash flood. Drainage size should be expanded, deeper and wider, so small-diameter drainage should be plucked out and replaced with wider drainage system.

 

Three, obstructions to regular flood flow should be removed and this includes removal of squatter settlements in riverbanks, beside creeks, and under bridges. This may sound “politically incorrect” and “insensitive” the cost to lives and properties of urban flash flooding is much higher.

 

Four, government should buy low-lying areas from private hands and convert these into deep mini-lakes, excess flood water to go there then be pumped out when the rains have stopped.

 

Five, these public projects will be costly but useful. Rechannel public spending on wasteful climate meetings, travels and junkets. “Rising ocean” from global warming and melting polar ice remains fictional but “rising rivers” are actual, real and annual events and problems. We should prepare for the latter, not the former.