The Marcos administration expects the government’s budget deficit, as a share of the economy, to drop by one percentage point next year amid the implementation of revenue-generating measures.

Data from the Department of Finance (DOF) showed that the government’s budget deficit as a share of gross domestic product (GDP) is seen narrowing to 5.1 percent in 2024 from 6.1 percent this year.

According to the DOF, the tapering is in line with the Marcos administration’s goal of gradually bringing down the budget deficit ratio to its pre-pandemic levels of 3.0 percent of GDP by 2028.

Based on the Development Budget Coordination Committee program, the budget deficit ratio is projected to drop by another percentage point by 2025 to 4.1 percent, before declining further to 3.5 percent, 3.2 percent, and 3.0 percent, by 2026, 2027, and 2028, respectively.

In 2024, government revenues are expected to increase by 12 percent to 4.201 trillion from P3.729 trillion. This is equivalent to 15.9 percent of GDP.

Finance Secretary Benjamin E. Diokno earlier said they expect that four tax measures under the medium-term fiscal framework would clear all hurdles in Congress before the end of the year.

These measures include the proposed passive income and financial intermediary taxation act (PIFITA), value-added tax (VAT) on digital service providers, and excise taxes on single-use plastics and pre-mixed alcohol.

Based on the DOF estimates, these tax revenue measures would generate a total of P145.5 billion in additional tax collections from 2024 to 2028.

Disbursements, on the other hand, are pegged at 5.564 trillion next year, or 21 percent of GDP. This is also higher by six percent compared with P5.228 trillion this year.

In nominal terms, the government’s budget deficit is programmed to reach P1.363 trillion, down from P1.499 trillion.

Last week, Rge Department of Budget and Management (DBM) announced that the Marcos administration was planning to propose a P5.768 trillion national budget for next year, the

Budget Secretary Amenah F. Pangandaman said that next year’s proposed budget will be 9.5 percent higher compared with this year’s P5.268 trillion appropriations.

“The proposed national budget will continue to prioritize expenditure items that promote social and economic transformation through infrastructure development, food security, digital transformation, and human capital development,” Pangandaman said.

The Cabinet will be meeting on June 22 to deliberate the proposed budget, the budget chief said.

Upon its approval, Pangandaman said the 2024 National Expenditure Program (NEP) will be submitted to Congress within three to five days following President Marcos' second State of the Nation Address on July 24th.