BEYOND BUDGET

Assalamu alaikum wa Rahmatullahi wa Barakatuh.

It is truly a season of gratitude and hope! On Dec. 22, 2023, President Ferdinand Marcos Jr. (PBBM) signed the P5.768 trillion Fiscal Year (FY) 2024 General Appropriations Act (GAA). I believe that this is the best gift that our President may present for our country. As he emphasized during the ceremonial signing of the FY 2024 GAA, more than just a ledger or spreadsheet, our national budget outlines the government's battle plan for next year.

I subscribe to the view of Senate Finance Committee Chair Sonny Angara that, "The national budget is more than a moneybag. First and foremost, it is a toolbox for development." In his Better Days article titled "What the national budget actually represents," he emphasized that "it funds our nation’s progress, turns our collective dreams into reality, and our people’s hopes into happiness."

For his part, House Speaker Martin Romualdez underscored in his message before the House adjourned for the Christmas break that, "The most important measure that we passed this year is the General Appropriations Bill for the FY 2024. The House of Representatives considers it a core mission to utilize the national budget next year to address four major concerns: Fighting inflation; keeping the price of rice and other food items at affordable levels; providing more jobs and livelihood; and expanding social services."

Thus, I extend my sincerest gratitude and congratulations to our President and esteemed legislators for the swift yet deliberate approval of our national budget.

As you may know, the FY 2024 National Budget stands at P5.768 trillion, or 21.7 percent of the country's Gross Domestic Product (GDP), and higher by 9.5 percent than this year's budget. It aligns with the administration's 8-Point Socioeconomic Agenda which aims to protect families' purchasing power, improve transportation, provide clean energy, reduce vulnerability from Covid-19, address learning losses, strengthen social protection, ensure sound macroeconomic fundamentals, and improve bureaucratic efficiency. Its crafting was guided by the Philippine Development Plan 2023-2028 and in line with the nation's first Medium-Term Fiscal Framework (MTFF) containing our macroeconomic and fiscal targets, such as 6.5-8.0 percent real GDP growth annually, a single-digit poverty rate by 2028, a 3.0 percent National Government (NG) deficit-to-GDP ratio by 2028, less than 60 percent NG debt-to-GDP ratio by 2025, and attaining upper middle-income status by 2025.

In the GAA, the Social Services Sector received the largest allocation followed by the Economic Services Sector. Prioritizing these sectors shows the government's commitment to eradicating poverty, promoting the development of human capital and infrastructure, and putting the nation back on a path for faster yet sustainable economic growth.

Honoring the taxpayers

I laud PBBM for reminding budget implementers to spend appropriations correctly—on time and within budget. As he emphasized, red tape, underspending, and overspending can lead to delays and illegal deviations, denying progress for our kababayans. Thus, PBBM expressed the budget commandment for us in government: To work for the people and the country, not for personal gains. Honoring taxpayers who make the national budget possible, he said, will bring our country closer to a brighter future.

Hence, we are one with the President in the belief that, "Debt is not the kind of inheritance we want for those who will come after us. Good fiscal stewardship imposes upon us discipline not to be led into the temptation of bloating what we owe."

To ensure fiscal prudence, the 2024 national budget shall continue to prioritize responsible debt management while supporting the country’s post-pandemic recovery, guided by our MTFF. Our MTFF started with a very high NG deficit-to-GDP ratio, exceeding seven percent during the pandemic. We’re making steady progress, aiming to bring it down to three percent by 2028. Reducing the deficit translates to less borrowing, but responsible borrowing for productive purposes remains crucial.

To further demonstrate the administration’s commitment to fiscal consolidation over the long term, NG deficit-to-GDP ratio is projected to decrease from 6.1 percent in 2023 to a target of above five percent in 2024.

 
Feeling the impact of the administration's efforts

Barely three years in office, I believe that PBBM's administration is already making headway in bringing back our country to its high-growth trajectory through budget allocations in the right sectors and the right projects and programs, backed by a whole-of-government and whole-of-society approach of the President.

The Philippine economy grew by 5.5 percent in the first three quarters of 2023, maintaining its position as one of the best-performing economies in the Asia-Pacific Region. Meanwhile, the GDP per capita is above pre-pandemic levels, and growth targets are maintained at 6.0-7.0 percent for 2023.

In addition, the Philippine Statistics Authority revealed in its preliminary report that the incidence of poverty among families declined from 18.0 percent in 2021 to 16.4 percent in the first semester of 2023, which translates to 230,000 homes leaving poverty. Meanwhile, poverty incidence among the population fell from 23.7 percent to 22.4 percent or 895,260 fewer impoverished Filipinos. Between 2021 and 2023, the incidence of poverty declined in 15 of the 17 regions. The decline in poverty incidence manifests that our country can achieve a single-digit poverty level by 2028.

Beyond budget, our vision of a Bagong Pilipinas provides the impetus for us in the government to not only respond to the needs of today but to make the country stronger, more resilient, and sustainable. However, we believe that our national budget is merely an instrument to realize our plans, programs, and projects. Ultimately, the success of all these relies on our people. Thus, as PBBM emphasized, we must all work in solidarity for a more empowered Philippines.

(Amenah F. Pangandaman is the current Secretary of the Department of Budget and Management.)