BUSINESS
Advocates Philippines
Sec. Recto Says PH Fiscal Goals On Track Thanks To Strong Revenue Gains And Prudent Spending
Photo credit: DOF
In a positive update for the Philippine economy, Finance Secretary Ralph Recto announced that the country is on course to meet its fiscal goals for 2024, thanks to strong revenue growth and disciplined spending during the first half of the year.
Speaking during the 2025 National Budget Deliberations in the Senate on August 13, 2024, Secretary Recto shared the good news: "So far, we are on track to meet our fiscal program for the year, having already achieved half of our targets."
This progress is evident in the numbers. By mid-year, total government revenues had jumped by 15.6%, reaching PHP 2.15 trillion. The Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) played a big part in this success, collecting PHP 1.84 trillion—a 10% increase from the previous year.
Secretary Recto credits the rise in revenue to several key strategies, particularly the government's push for digitalization, stricter enforcement of tax laws, and closing loopholes in the system, especially in e-commerce. "This robust revenue performance placed us among Asia’s top revenue-to-GDP ratios at 17.1% for the first half of the year. And this is above our full-year target of 16.1%," Recto noted with pride.
Interestingly, non-tax revenues saw a significant boost as well, surging by 63.3% to PHP 314.2 billion. This jump was largely due to the Department of Finance's decision to raise the dividend rates of government-owned and -controlled corporations (GOCCs) from 50% to 75%.
But it's not just revenue that's looking good—the government's expenditures are also growing steadily. In the first half of 2024, spending increased by 14.6%, reaching PHP 2.76 trillion. Despite this rise, the fiscal deficit has been kept under control, amounting to PHP 613.9 billion as of the end of June, or 4.9% of GDP—well below the full-year target of 5.6%.
Looking ahead, Secretary Recto is confident that the government's revenues will continue to grow at an average of 10.3% annually. He's also tasked the BIR and BOC with stepping up their efforts, as tax collections are expected to rise by 11.8% each year, outpacing the expected 8.7% average increase in nominal GDP from 2024 to 2028.
These efforts will be complemented by refined revenue reforms that the Department of Finance has carefully recalibrated to ensure they don't place undue burdens on taxpayers. By 2028, the tax effort is projected to rise from 14.4% in 2024 to 16.3%.
On the expenditure side, government spending is expected to grow at an average of 7.4%, maintaining a steady level of about 21.1% of GDP. As a result, the fiscal deficit is projected to decrease from 5.6% in 2024 to 3.7% by 2028.
During his Senate briefing, Secretary Recto reassured everyone that the government's management of the country's debt is under strict control. As of June, the gross financing stood at 61% of the full-year target of PHP 2.57 trillion, including a landmark USD 2 billion global bond issuance last May, which Recto described as one of the government’s most affordable borrowing costs.
With a strong emphasis on domestic financing, the national debt has increasingly been converted into local currency, now making up 68.3% of total borrowings. Long-term debts have also been prioritized, constituting 79.8% of the country's debt portfolio, which minimizes rollover risks.
Secretary Recto assured the public that there's no need to worry about the country's outstanding debt, as the economy is robust enough to generate the necessary resources to meet debt obligations. With the government's refined Medium-Term Fiscal Program, the country’s deficit and debt levels are expected to gradually decline, while efforts to create more jobs, increase incomes, and reduce poverty will continue.
He concluded by emphasizing that government spending will remain focused on key areas like education, infrastructure, food security, social protection, and national security to support the country’s growth. "Sisiguraduhin po natin na masinop ang ating pag-gastos at babalik sa taumbayan ang bawat sentimong nalikom," Recto said, ensuring that every peso spent will benefit the Filipino people.
Speaking during the 2025 National Budget Deliberations in the Senate on August 13, 2024, Secretary Recto shared the good news: "So far, we are on track to meet our fiscal program for the year, having already achieved half of our targets."
This progress is evident in the numbers. By mid-year, total government revenues had jumped by 15.6%, reaching PHP 2.15 trillion. The Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) played a big part in this success, collecting PHP 1.84 trillion—a 10% increase from the previous year.
Secretary Recto credits the rise in revenue to several key strategies, particularly the government's push for digitalization, stricter enforcement of tax laws, and closing loopholes in the system, especially in e-commerce. "This robust revenue performance placed us among Asia’s top revenue-to-GDP ratios at 17.1% for the first half of the year. And this is above our full-year target of 16.1%," Recto noted with pride.
Interestingly, non-tax revenues saw a significant boost as well, surging by 63.3% to PHP 314.2 billion. This jump was largely due to the Department of Finance's decision to raise the dividend rates of government-owned and -controlled corporations (GOCCs) from 50% to 75%.
But it's not just revenue that's looking good—the government's expenditures are also growing steadily. In the first half of 2024, spending increased by 14.6%, reaching PHP 2.76 trillion. Despite this rise, the fiscal deficit has been kept under control, amounting to PHP 613.9 billion as of the end of June, or 4.9% of GDP—well below the full-year target of 5.6%.
Looking ahead, Secretary Recto is confident that the government's revenues will continue to grow at an average of 10.3% annually. He's also tasked the BIR and BOC with stepping up their efforts, as tax collections are expected to rise by 11.8% each year, outpacing the expected 8.7% average increase in nominal GDP from 2024 to 2028.
These efforts will be complemented by refined revenue reforms that the Department of Finance has carefully recalibrated to ensure they don't place undue burdens on taxpayers. By 2028, the tax effort is projected to rise from 14.4% in 2024 to 16.3%.
On the expenditure side, government spending is expected to grow at an average of 7.4%, maintaining a steady level of about 21.1% of GDP. As a result, the fiscal deficit is projected to decrease from 5.6% in 2024 to 3.7% by 2028.
During his Senate briefing, Secretary Recto reassured everyone that the government's management of the country's debt is under strict control. As of June, the gross financing stood at 61% of the full-year target of PHP 2.57 trillion, including a landmark USD 2 billion global bond issuance last May, which Recto described as one of the government’s most affordable borrowing costs.
With a strong emphasis on domestic financing, the national debt has increasingly been converted into local currency, now making up 68.3% of total borrowings. Long-term debts have also been prioritized, constituting 79.8% of the country's debt portfolio, which minimizes rollover risks.
Secretary Recto assured the public that there's no need to worry about the country's outstanding debt, as the economy is robust enough to generate the necessary resources to meet debt obligations. With the government's refined Medium-Term Fiscal Program, the country’s deficit and debt levels are expected to gradually decline, while efforts to create more jobs, increase incomes, and reduce poverty will continue.
He concluded by emphasizing that government spending will remain focused on key areas like education, infrastructure, food security, social protection, and national security to support the country’s growth. "Sisiguraduhin po natin na masinop ang ating pag-gastos at babalik sa taumbayan ang bawat sentimong nalikom," Recto said, ensuring that every peso spent will benefit the Filipino people.
Aug 13, 2024
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