By Gabriel Pabicu Lalu, August 10, 2023; Inquirer.Net
MANILA, Philippines — The Philippines has been getting closer to the growth goals set by President Ferdinand Marcos Jr.’s administration, the economic cluster assured the House of Representatives as deliberations for the proposed 2024 national budget started.
During their presentation on Thursday, different agencies within the Development Budget Coordination Committee (DBCC) like the Bangko Sentral ng Pilipinas (BSP), the Department of Finance (DOF), the National Economic and Development Authority (Neda), and the Department of Budget and Management (DBM) showed where the country is currently standing in various parameters.
Finance Secretary Benjamin Diokno said that in terms of the Medium-Term Fiscal Framework (MTFF) goal to reduce the debt-to-gross domestic product (GDP) ratio to less than 60 percent by 2025, the country is currently at 61 percent to 63.5 percent.
“To ensure sound fiscal management, the DOF, together with the economic team, has set the medium-term fiscal framework targets. In particular, we aim the following: bring down debt-to-GDP ratio to less than 60 percent by 2025 wherein as of Q1 (1st quarter) 2023 debt-to-GDP ratio is at 61 percent down from 63.5 percent from Q1 2022,” Diokno said.
“Reduce deficit-to-GDP ratio to 3 percent by 2028 wherein as of Q1 2023 deficit-to-GDP is at 4.8 percent. And number three, maintain investment in infrastructure at 5 to 6 percent of GDP annually wherein in 2022 infrastructure spending is at 5 percent,” he added.
Diokno also said that the tax collections of the Bureau of Internal Revenue (BIR) — an attached agency of the DOF — and the non-tax revenues increased by 18 percent from 2021 to 2022.
“In terms of revenue, tax revenue is projected to increase from P3.5 trillion in 2023 to P6.5 trillion in 2028, or from 14.4 percent of GDP to 16.9 percent of GDP. On the other hand, non-tax revenue is estimated to grow from P191.1 billion in 2023 to P183.7 billion in 2028,” he said.
“I am happy to announce that we are on track to meet the MTFP (Medium-Term Fiscal Plan) targets. In fact, in 2022, the national government revenue collections increased by 18 percent year-on-year and exceeded the DBCC targets,” he added.
Meanwhile, Neda chief Secretary Arsenio Balisacan showed that the latest data on Gross National Income (GNI) per capita, or the gross income of each individual annually, has risen to US$3,950. While this is still far from the 2028 goal of US$6,044 to US$6571, it is an increase from 2021’s US$3,550.
Similarly, the unemployment rate in the country has decreased, averaging 5.4 percent in 2022, to 4.6 percent in January and April 2023, and 4.5 percent in June 2023.
The end-of-plan target is to lower the rate to between 4.0 percent and 5.0 percent.
“We expect to achieve the upper-middle income country status by 2025. Last year our per capita GNI increased to US$3,950, from US$3,550 in 2021. Meanwhile, the target unemployment rate is within four to five percent […] The latest data showed that the unemployment rate further improved to 4.5 percent,” Balisacan said.
Balisacan admitted that the country needs to catch up regarding the percentage of wage and salaried workers in private establishments, total employed workers, and food inflation.
Food inflation for January to July 2023 is estimated to be 8.6 percent and 6.3 percent for July alone. This is far from the MTFF goal of 2.0 percent to 4.0 percent.
DBM and the rest of the DBCC said that the MTFF and the eight-point socioeconomic agenda of the Marcos administration were the guiding light in crafting the proposed budget.
The MTFF, the 2022-2028 fiscal framework set by President Marcos’ administration, was adopted by the House as early as August 2022. The eight-point socioeconomic agenda meanwhile includes the following:
- Protect purchasing power of families
- Reduce vulnerability and mitigate scarring from the COVID-19 pandemic
- Ensure sound macroeconomic fundamentals and government processes
- Create more jobs
- Create quality jobs
- Create green jobs
- Ensure a level playing field
- Uphold public order and safety, peace and security
The deliberations for the proposed 2024 national budget amounting to P5.768 trillion started on Thursday, with the opening hearing of the Committee on Appropriations headed by Speaker Ferdinand Martin Romualdez himself.
Romualdez has assured the public that the House will closely examine each agency’s proposed funding in 2024, ensuring that each centavo will be “judiciously spent.”
He also promised that the House would submit the budget before Congress goes on a break before October so that the Senate would have enough time to deliberate the general appropriations bill.