Finance Secretary Ralph G. Recto has underscored that the Philippines is on track to meet its fiscal program for 2024 on the back of the government’s robust revenue effort and manageable deficit level during the first half of the year.

“So far, we are on track to meet our fiscal program for the year, having already achieved half of our targets,” he said during the 2025 National Budget Deliberations in the Senate of the Philippines on August 13, 2024.

As of mid-year, total revenues grew by 15.6% to PHP 2.15 trillion.

Tax collections from the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) totaled PHP 1.84 trillion, which is 10% higher than in 2023.

Secretary Recto credited this feat through digitalization, strict enforcement, and plugging of leakages in the tax system—especially from e-commerce.

Meanwhile, non-tax revenues recorded a substantial growth of 63.3%, totaling PHP 314.2 billion as the Department of Finance (DOF) hiked government-owned and -controlled corporations’ (GOCCs) dividend rates to 75% from 50%.

“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%,” the Finance Chief said.

Expenditures also grew by 14.6% in the same period, reaching PHP 2.76 trillion. In the first semester of 2024, expenditure-to-GDP stood at 21.9% in the first half of the year.

The fiscal deficit has remained very manageable at PHP 613.9 billion as of end-June 2024. As a percentage of GDP, the deficit stood at 4.9% in the first semester, below the full-year target of 5.6%.

Over the medium term, the government expects revenues to grow by an average of 10.3% annually.

Revenues as a percentage of GDP will also increase from 16.1% in 2024 to 17.0% in 2028.

Secretary Recto is tasking the BIR and BOC to work doubly hard and boost efficiency as tax collections are expected to rise by 11.8% annually, which will outpace the roughly 8.7% 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% from 14.4% 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,” Secretary Recto said.

Disbursements, on the other hand, are expected to grow by an average of 7.4% and remain at about 21.1% of the GDP.

“With higher government revenue collections and improved expenditure management, our fiscal deficit is projected to drop from 5.6% in 2024 to 3.7% by 2028,” the Finance Chief 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% of the full-year goal of PHP 2.57 trillion. This includes the landmark USD 2 billion global bond issuance last May, which is one of the government’s most affordable and cost-effective borrowing costs.

The country’s heavy bias on domestic financing has facilitated the continued redenomination of the national debt into local currency, now representing 68.3% of our total borrowings.

The DOF also strategically favors long-term obligations to reduce our reliance on short-term debt and minimize rollover risks. Currently, long-term debts constitute 79.8% of the country’s total portfolio.

Secretary Recto assured the public that there is no cause for concern regarding 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 assured that with the government’s refined Medium-Term Fiscal Program, the country’s deficit and debt will gradually decline in a realistic manner while creating more jobs, increasing people’s incomes, and decreasing poverty in the process.

Secretary Recto prioritized recalibrating the government’s growth and fiscal targets to ensure that they are achievable and adaptable to external shocks.

“[U]nder 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,” he said.

The Finance Chief stressed that government spending will continue to prioritize education, infrastructure, food security, social protection, and national security to support the country’s growth momentum.

“Sisiguraduhin po natin na masinop ang ating pag-gastos at babalik sa taumbayan ang bawat sentimong nalikom,” he said.