BEYOND BUDGET

*Assalamu alaikum wa Rahmatullahi wa Barakatuh.* It’s been said that the best way to create the future is to build it now. The agenda for prosperity is a sturdy benchmark of how we’re visualizing our future and working towards economic transformation with inclusivity and sustainability as priorities post-pandemic. Despite various challenges, it gives me pride to say that unity is truly the key to ensuring the future happens. In 2022, the country achieved 7.6 percent GDP growth. Our real GDP has been projected to be the highest in the ASEAN region this year. In the first quarter of 2023, our economy expanded by 6.4 percent. From Q3 2022 to Q1 of 2023, our growth on average was 7.1 percent. In just three quarters, the Philippine economy transformed to become one of the best-performing economies in East Asia and the G7. This simply means that we are on the right track to fulfilling our economic goals. It's always good to deliver positive news about our country, and that's how I felt last week at the second Philippine Economic Briefing (PEB) in Singapore, where I presented our priority expenditures which cater to the objectives of our Medium-Term Fiscal Framework, Eight-Point Socioeconomic Agenda, and the Philippine Development Plan 2023 to 2028. Our 2023 National Budget amounts to ₱5.268 trillion — a 4.9 percent increase from 2022, and is equivalent to 21.9 percent of our GDP. 38.1 percent of this has been allotted for the social services sector to ensure quality education, healthcare, and social protection. Education remains our top priority (17 percent), as enshrined in our Constitution. We also have significantly increased the budget for our health sector. Social protection programs were likewise given priority. To expand agriculture as a driving force for growth and food security, Agriculture and Agrarian Reform received a budgetary boost of 29 percent compared to 2022. And with that, the share of the sector in our GDP is likewise on increasing trend so far. 25.3 percent of the national budget was given to infrastructure — equivalent to 5.5 percent of GDP. This includes prioritizing investments in physical, social and digital infrastructure. Budget for climate change adaptation and mitigation also increased by 60 percent compared to last year. To ensure the continuity and sustainability of gains from this year's priority programs, the 2024 national budget shall also prioritize shovel-ready infrastructure projects, investments in human capital development, and sustainable agriculture and food security, among others.

Reforms and digitalization

I also mentioned during the Singapore PEB key structural reforms that are being pushed and introduced to complement the government’s priority programs. First is the President’s recent signing of Executive Order (EO) 29, which directs the full adoption of the Integrated Financial Management Information System in government. This comes after EO 170, issued in 2022, directing the adoption of digital payments for government disbursements and collections. In addition, we are optimistic about the nearing passage of the Progressive Budgeting for Better and Modernized Governance Bill and the institutionalization of Public Financial Management reforms, including the cash-based budgeting system. Further, through the national government rightsizing program, we will establish a more active, efficient, and responsive government workforce. The Green Public Procurement Roadmap, meanwhile, will ensure sustainability with the acquisition of common-use products and equipment that meet green requirements. I'm also pleased that the Maharlika Investment Fund, a first for the country, is on track to being established by year-end. The World Bank (WB) is feeling bullish about the country achieving above-middle-income status in the next two years. Fitch Ratings raised its outlook for the Philippines to “stable.” And the S&P Global Market Intelligence forecasted that the Philippines may become a trillion-dollar economy by 2033. WB Country Director Ndiame Diop said that the Philippines' formula that resulted in our 7.6 percent growth is interconnected structural reforms + prudent macro-fiscal and macro-financial management. I agree. But I also believe that our growth and strength emanate from our whole-of-government approach — PBBM and his entire cabinet, the government in unity, and our private sector working together. I likewise agree with Finance Secretary Benjamin Diokno when he emphasized that to underpin our agenda for prosperity, our country needs cooperative partnerships with the private sector. He said that “harnessing private capital and expertise through the public-private partnership mechanism is vital in upgrading our health, energy, logistics, agriculture, transportation, among other sectors.” This echoes NEDA Secretary Arsenio Balisacan’s firm stance that underscored the private sector’s role as growth and innovation driver. He believes that tapping into the private sector’s financial muscle, as well as technical and managerial capacities “will ultimately result in better public services, lower consumer prices, and improved quality of life for all Filipinos.” Indeed, with the investments and support of our partners and stakeholders, the Philippines can regain its former glory of being the “Darling of Southeast Asia” as described by DBS Group CEO Piyush Gupta. This also underscores the importance of economic roadshows, such as the Singapore PEB in continuously bringing in foreign investments in the country. Ultimately, as envisioned by President BBM, we will bring the country back as top of mind destination for investment opportunities in the international arena. Beyond budget, boosting the country's economic development takes a multi-pronged approach that demands inclusivity and sustainability. Laying the groundwork means covering all bases, from social services, education, agriculture, infrastructure, and digitalization while making key reforms on public service delivery. It's a tough job, with more challenges to come. But, beyond budget, a firm resolve, strong public-private cooperation, and a concrete plan to build a better future are imperative. The future of the Philippines is looking bright. *(Amenah F. Pangandaman is the current Secretary of the Department of Budget and Management.)*