Finance Secretary Ralph Recto. (PNA file photo by Yancy Lim)
MANILA – The Philippines is on track to meet its fiscal program for this year on the back of the government’s robust revenue effort and manageable deficit level during the first half, Finance Secretary Ralph Recto said.
“So far, we are on track to meet our fiscal program for the year, having already achieved half of our targets,” Recto said during the 2025 National Budget Deliberations in the Senate of the Philippines on Tuesday.
Data from the DOF showed that as of the first half of the year, the country's total revenues went up by 15.6 percent to PHP2.15 trillion.
Tax collections from the Bureau of Internal Revenue and the Bureau of Customs reached PHP1.84 trillion, up by 10 percent from 2023.
Non-tax revenues, on the other hand, went up by 63.3 percent to PHP314.2 billion.
“This robust revenue performance placed us among Asia’s top revenue-to-GDP (gross domestic product) ratios at 17.1 percent for the first half of the year. And this is above our full-year target of 16.1 percent,” Recto said.
Expenditures increased by 14.6 percent reaching PHP2.76 trillion.
In the first semester of 2024, expenditure-to-GDP settled at 21.9 percent.
Recto said the fiscal deficit also 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 which is below the full-year target of 5.6 percent.
Over the medium term, the government expects revenues to grow by an average of 10.3 percent annually while revenues as a percentage of GDP will also increase from 16.1 percent in 2024 to 17 percent in 2028.
Recto said the BIR and BOC are instructed to work doubly hard and boost efficiency as tax collections are expected to rise by 11.8 percent annually, which will outpace the roughly 8.7 percent average increase of nominal GDP every year from 2024 to 2028.
This will be driven by projected double-digit collection growths of both agencies.
By 2028, the tax effort will rise to 16.3 percent from 14.4 percent in 2024.
“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.
Disbursements, on the other hand, are expected to grow by an average of 7.4 percent and remain at about 21.1 percent of the GDP.
“With higher government revenue collections and improved expenditure management, our fiscal deficit is projected to drop from 5.6 percent in 2024 to 3.7 percent by 2028,” Recto said.
Meanwhile, he assured the 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, the gross financing stands at 61 percent of the full-year goal of PHP2.57 trillion.
This includes the USD2-billion global bond issuance last May.
He said there is no cause for concern over the Philippine government's total outstanding debt because the size of the country’s economy is large enough to allow the government to generate without difficulty the resources needed to meet its debt obligations.
He further said that with the government’s Medium-Term Fiscal Program, the country’s deficit and debt will gradually decline while creating more jobs, increasing people’s income, and decreasing poverty. (PNA)
