Portugal's Public Bodies Owe a Billion Euros in Overdue Bills Under a Stricter Rule, and Hospitals Account for 690 Million

Portugal's public bodies ended August owing 1,005.8 million euros in bills they had failed to pay on time, according to the monthly budget report the Ministry of Finance published on Wednesday. The stock of overdue bills rose by 294.2 million euros in a single month. The public hospitals that make up the Serviço Nacional de Saúde (National Health Service, or SNS) account for 689.9 million euros of it, only months after the state put 1.43 billion euros into them to clear old debts.

The figures come from the Síntese da Execução Orçamental (Budget Execution Summary) for January to August, compiled by the Entidade Orçamental (Budget Entity), the finance ministry body whose website has replaced that of the old Direção-Geral do Orçamento (Budget Directorate). The same report shows the public accounts still in surplus, but only just: 249.3 million euros for the first eight months, against 2,048.7 million euros a year earlier.

A stricter definition of a late bill

Part of the rise is a change in the rules, and the report says so plainly. A law published on 1 June, which amended Portugal's law on public spending commitments and late payments, shortened the time after which an unpaid bill counts as overdue. It used to be 90 days after the agreed payment date. Since June it is 30 days for most public bodies, and 60 days for the SNS and a few other cases the law names.

Because of that break, the Budget Entity will not compare August with the same month of 2025. The monthly series shows what happened after the switch. Under the old rule, the total had fallen to 319.8 million euros by May. It was 566.6 million euros in June, the first month under the new rule, 711.5 million euros in July and 1,005.8 million euros in August.

Health drove almost all of August's increase: 226.5 million euros of the 294.2 million, according to the report. The rest came mainly from public companies that sit inside the government accounts (32.3 million euros) and the regional governments of the Azores and Madeira (26 million euros). Councils moved the other way; their overdue bills fell to 23.6 million euros.

The hospital debt clear-out, and what came back

The pattern at the hospitals stands out. The Unidades de Saúde EPE, the public health units run as state companies, had 21.5 million euros of overdue bills at the end of May. By August the figure was 689.9 million euros. Over the same months, the state paid out the capital injections meant to settle the hospitals' old debts: 1,430.4 million euros of capital grants by August, against 199.1 million euros a year earlier.

Those injections also explain most of the fall in the surplus. The SNS used them to pay suppliers 1,426.5 million euros of old bills by August. Public accounts record money when it is paid, so the payments count as spending this year, even though national accounts had already booked the costs in earlier periods. Without them, the report says, the surplus to August would have been 1,675.8 million euros, still 553 million euros below 2025.

The SNS's own account shows the strain. Its spending rose 11.9 percent in eight months and its income 8.2 percent, leaving a deficit of 1,205.2 million euros before the capital grants. Medicines bought by hospitals rose 8.5 percent, and those dispensed through pharmacies 9.6 percent. Staff numbers were up 1.6 percent on a year earlier, or 2,472 more people, the report adds, citing the SNS transparency portal.

The Portugal Brief reported on the same hospital payments in July's figures, when the parliament's budget office put the surplus at 282 million euros. At the end of 2025, the state's overdue bills stood at 337 million euros under the older definition.

Where the money came in

Revenue grew 7.9 percent, slower than spending at 10.4 percent. Tax revenue across the public sector rose 4.9 percent to 46,682.8 million euros. For the central state alone it reached 41,592.1 million euros, up 4.7 percent.

• VAT brought in 16,223.3 million euros net, up 8.8 percent.
• Income tax on individuals (IRS) rose 7.1 percent to 14,096.7 million euros, even though refunds were up 12.1 percent.
• Corporate income tax (IRC) fell 5.7 percent to 4,933 million euros, partly because refunds rose.
• Fuel tax (ISP) fell 3.9 percent to 2,408.9 million euros, and tobacco tax 4.6 percent.
• Council property tax (IMI) rose 24.4 percent, the report says, the main reason councils' tax take grew 7.3 percent.

Social security contributions rose 7.4 percent, which the report puts down to more employees and higher declared pay. Among other income, the state received 987.5 million euros in dividends from the state bank Caixa Geral de Depósitos, against 671.5 million euros in 2025. The report also names higher fees from golden visa residence permits, collected by AIMA (the Agency for Integration, Migration and Asylum), which it links to AIMA's work clearing its backlog of those cases and to rising demand. It gives no amount.

Investment, pay and the storm bill

Public investment grew 2,190.3 million euros, or 46.9 percent, as bodies raced to spend money from the Plano de Recuperação e Resiliência (Recovery and Resilience Plan, or PRR) before its deadline. The report names student housing at universities, business funding, the SNS, new CP trains and council housing work. Staff costs rose 5.5 percent, driven by pay rises across the public sector and a higher minimum wage.

The storm response has now cost 586 million euros since Storm Kristin struck in January. The largest single item is 235.6 million euros of social security contributions that affected employers did not have to pay. On the spending side, 350.2 million euros has gone out, including 94.2 million euros to repair people's permanent homes, 79.4 million euros for natural, cultural and sports sites, 75.4 million euros for council infrastructure and 56.9 million euros to help firms keep workers on.

What this means for you

• If you supply a hospital or public body, the new rule works in your favour on paper: a bill unpaid after 30 days, or 60 at an SNS body, now counts as overdue and shows up in these monthly figures. August's numbers suggest hospitals are again paying slowly.
• If you pay tax in Portugal, nothing in this report changes your bill. The IMI figure reflects what councils collected, not a change in rates.
• If you follow the budget, the government's draft 2027 budget is due on 10 October, and the year's cash surplus is now small enough for the last four months to erase it.