NextGen Day

Manila, Philippines – The Philippine government is making substantial strides toward meeting its medium-term fiscal framework (MTFF) targets, crucial milestones that pave the way for the nation’s economic transformation. Finance Secretary Benjamin Diokno reaffirmed this during the Development Budget Coordination Committee (DBCC) briefing on the proposed PHP5.768-trillion 2024 national budget.

Diokno highlighted the comprehensive MTFF goals that align with the Marcos administration’s 8-point socioeconomic agenda, set to be achieved by 2028. These objectives encompass various key aspects of the nation’s fiscal health and economic growth. The targets include:

1. The debt-to-gross domestic product (GDP) ratio will be reduced to less than 60% by 2025.
2. Decrease in the deficit-to-GDP ratio to 3% by 2028.
3. Sustaining investment in infrastructure at 5 to 6% of GDP annually (5% in 2022).

Diokno also underscored the anticipated growth in revenue generation over the coming years. Tax revenue is projected to escalate from PHP3.5 trillion in 2023 to PHP6.5 trillion by 2028, reflecting a shift from 14.4% to 16.9% of GDP. Non-tax revenue is expected to experience growth from PHP191.1 billion in 2023 to PHP183.7 billion in 2028.

“We are firmly on track to meet the MTFF targets. In 2022, national government revenue collections surged by 18% year-on-year, surpassing DBCC targets. Similarly, the first semester of 2023 witnessed a 7.7% growth in revenues, outperforming DBCC targets,” Diokno affirmed.

The Department of Finance (DOF) has also championed a fiscal consolidation program designed to lower the debt-to-GDP ratio further. Combined with projected robust GDP growth, this approach aims to bring the debt-to-GDP ratio below 60% by 2025. Last year’s actual debt-to-GDP ratio of 60.9% indicates significant progress toward this goal.

Diokno highlighted the DOF’s collaboration with legislative priorities to ensure seamless alignment with the MTFF objectives. Key legislative focuses encompass comprehensive tax reform packages, such as excise tax on single-use plastics (SUP), rationalization of mining fiscal regime, excise tax on sweetened beverages and junk food, carbon taxation, capital market development bill, and more.

“This slate of tax revenue measures is projected to yield PHP120.5 billion or 0.5% of GDP in 2024 and PHP183.2 billion or 0.6% of GDP in 2026. This concerted effort ensures a robust fiscal outlook that supports economic growth and transformative progress,” Diokno affirmed.

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The Philippine government’s commitment to its medium-term fiscal framework propels the nation toward a transformative economic future. Emphasizing fiscal prudence, revenue growth, and strategic investment, these ambitious targets are poised to reshape the country’s economic landscape. The path to sustainable growth becomes clearer as the government aligns policies, initiatives, and legislative measures with these objectives.

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