PH on track for 2024 fiscal targets, DOF says

The Philippines is on course to meet its fiscal targets for 2024, buoyed by strong mid-year revenue growth and a manageable deficit, according to Finance Secretary Ralph G. Recto.

During the 2025 National Budget Deliberations at the Senate on August 13, 2024, Recto highlighted the government’s progress, noting that total revenues have surged by 15.6% to PHP 2.15 trillion as of June.

“So far, we are on track to meet our fiscal program for the year, having already achieved half of our targets,” Recto said.

The robust revenue collection was primarily driven by tax collections from the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC), which together contributed PHP 1.84 trillion—a 10% increase from 2023.

Recto attributed this success to the digitalization of tax processes, strict enforcement, and efforts to address leakages, particularly in the e-commerce sector.

Non-tax revenues also posted significant growth, rising by 63.3% to PHP 314.2 billion. The surge was partly due to the Department of Finance’s (DOF) decision to increase dividend rates from government-owned and -controlled corporations (GOCCs) to 75% from the previous 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%,” Recto added.

On the expenditure side, the government’s spending grew by 14.6% to PHP 2.76 trillion. The fiscal deficit stood at PHP 613.9 billion by the end of June 2024, which represents 4.9% of GDP, remaining below the full-year target of 5.6%.

Recto emphasized that the government’s fiscal health is sustainable, with revenues projected to grow by an average of 10.3% annually over the medium term.

By 2028, revenue as a percentage of GDP is expected to rise to 17.0%, up from 16.1% in 2024. This will be supported by an anticipated 11.8% annual increase in tax collections, which is expected to outpace the roughly 8.7% average growth in nominal GDP.

“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 explained.

Disbursements are also expected to grow by 7.4% on average, with the government maintaining its commitment to spending on education, infrastructure, food security, social protection, and national security.

“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,” Recto stated.

As of June, the gross financing has reached 61% of the full-year goal of PHP 2.57 trillion, including a landmark $2 billion global bond issuance in May 2024.

The government has strategically emphasized domestic financing, which now accounts for 68.3% of total borrowings, and long-term obligations, which make up 79.8% of the country’s debt portfolio.

Recto reassured the public about the sustainability of the country’s debt, emphasizing that the economy’s size allows the government to meet its obligations without difficulty.

The Finance Secretary also noted that the government’s Medium-Term Fiscal Program is designed to gradually reduce the deficit and debt while fostering job creation, income growth, and poverty reduction.

“[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,” Recto said, affirming the government’s commitment to prudent spending.