MANILA: The Philippines stays on track to meet its fiscal program for 2024 due to the government’s robust revenue effort and manageable deficit level during the first half of the year, Finance Secretary Ralph Rector assured senators on Tuesday.
During the briefing of the Development Budget Coordination Committee (DBCC) to the Senate Committee on Finance, Recto reported that total revenues increased by 15.6 percent, driven by higher tax collections and non-tax revenues.
‘So far, we are on track to meet our fiscal program for the year, having already achieved half of our targets,’ Recto said.
He further reported that expenditures grew by 14.6 percent, resulting in a fiscal deficit of PHP 613.9 billion.
The government, Recto said, expects revenues to grow by an average of 10.3 percent annually over the medium term, while disbursements are projected to increase by 7.4 percent.
‘This robust revenue performance placed us among Asia’s top revenue-to-GDP (gross domestic product) ratios at 17.1 percent for the fi
rst half of the year. And this is above our full-year target of 16.1 percent,’ he said.
Recto said fiscal deficit is also expected to drop from 5.6 percent in 2024 to 3.7 percent by 2028.
“The fiscal deficit has remained very manageable at PHP613.9 billion as of end-June 2024. As a percentage of GDP, the deficit stood at 4.9 percent in the first semester, below the full-year target of 5.6 percent,” he said.
Over the medium term, the government expects revenues to grow by an average of 10.3 percent annually.
Revenues as a percentage of GDP are also expected to increase from 16.1 percent in 2024 to 17.0 percent in 2028 with the help of the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) by working hard to boost efficiency as tax collections.
‘These projections took into account the additional revenues from the refined revenue reforms of the DOF, which we recalibrated to ensure that they do not place undue burdens on the taxpayers,’ Recto said.
‘With higher government revenue collections a
nd improved expenditure management, our fiscal deficit is projected to drop from 5.6 percent in 2024 to 3.7 percent by 2028,’ he added.
Tax collections from the BIR and the BOC totaled PHP1.84 trillion, which is 10 percent higher than in 2023.
Meanwhile, the finance chief assured members of the Senate that the government is continuously managing the country’s debt ‘according to the highest standards of fiscal discipline.’
As of June, Recto said the gross financing stands at 61 percent of the full-year goal of PHP 2.57 trillion which includes the landmark USD2 billion global bond issuance last May, making it one of the government’s most affordable and cost-effective borrowing costs.
He reported that the country has a high reliance on domestic financing, with 68.3 percent of the national debt denominated in local currency.
Recto clarified that despite the high debt, the country’s economy is large enough to meet its debt obligations.
Under the Medium-Term Fiscal Program, he assured that the deficit and deb
t are aimed to be gradually reduced while creating jobs, increasing incomes, and decreasing poverty.
‘Under this, we have ensured that every peso to be collected or borrowed will be stretched to deliver the biggest bang per buck for the Filipino people,’ Recto said.
He told senators that the government’s spending priorities include education, infrastructure, food security, social protection, and national security.
Source: Philippines News Agency