BEYOND BUDGET
Assalamu alaikum wa Rahmatullahi wa Barakatuh.
Last Monday, President Ferdinand R. Marcos Jr. delivered his second State of the Nation Address, reflecting on his administration’s first year in office which focused on socioeconomic transformation, laying the groundwork for a sustainable future, a “Bagong Pilipinas.” His first year saw victories, unity, and growth momentum, enabling the economy to rebound from the pandemic.
In the past year, the President and the entire Cabinet have started many reforms, which resulted in the country's remarkable growth.
Fastest, earliest budget
On Dec. 16, 2022, PBBM signed the ₱5.268 trillion National Budget for FY 2023, making it the fastest-signed General Appropriations Act (GAA) in recent history.
Titled “Agenda for prosperity: Economic transformation towards inclusivity and sustainability,” the national budget was aligned with the government's economic objectives as outlined in the Medium-Term Fiscal Framework (MTFF), which was adopted by both chambers of Congress, to consolidate the national government’s resources so that these are mobilized and utilized to gain maximum benefits and high multiplier effects. The targets include 6.5-7.5 percent real GDP growth in 2022; 6.5-8 percent real GDP growth annually between 2023 to 2028; single-digit poverty rate by 2028; 3 percent NG deficit-to-GDP ratio by 2028; less than 60 percent NG debt-to-GDP ratio by 2025; and attainment of upper middle-income status.
The administration also defined its Eight-Point Socioeconomic Agenda to ensure food security, reduce transportation and logistics costs, lower energy costs for families, ensure sound fiscal management, address health, address learning losses, and strengthen social protection.
Aligned with these, the Philippine Development Plan 2023-2028 was also established to re-energize job creation and expedite poverty reduction by redirecting the economy on a high-growth trajectory, that is inclusive, and with an environment that affords equal opportunities for all Filipinos.
PH good news
The country’s economic situation has improved immensely during the President’s first year in office, as evidenced by the 7.6 percent Gross Domestic Product (GDP) expansion, surpassing the 6.5 to 7.5 percent government target real GDP in 2022.
In June 2023, headline inflation decreased to 5.4 percent, marking the fifth consecutive month of deceleration from an 8.7 percent peak in January 2023. The full-year fiscal deficit for 2022 was ₱1,614.1 billion, down by 3.4 percent year-on-year and equivalent to 7.6 percent of GDP.
Further, the number of employed Filipinos increased to 95.7 percent in May 2023, with 48.26 million employed persons. Meanwhile, the unemployment rate dropped to 4.3 percent in May 2023, the second lowest since April 2005.
Thus, when I was asked during interviews what the greatest achievement of the President was by far, I would say, it is putting the country back on the international map. As the President said, “The economy is revived and rejuvenated, backstopped by a favorable enabling environment and the strong rule of law.”
The country's credit rating and economic outlook remain positive. In fact, the World Bank has rated the country’s growth forecast for 2023 at 6 percent. The International Monetary Fund said that the nation's GDP growth forecast ranks first among the ASEAN. Meanwhile, the Asian Development Bank forecasts our economy to grow by 6 percent this year, climbing further by 6.2 percent in 2024.
In addition, Fitch Ratings affirmed PH’s credit rating at “BBB,” and upgraded its outlook to “Stable.” Standard & Poor’s credit rating for the Philippines stands at BBB+ with a stable outlook. Japan’s leading credit watcher, Japan Credit Rating Agency affirmed the Philippines’ investment-grade credit rating of “A-” with a stable outlook amid global uncertainties and a high inflation environment.
We, at the economic team, continue to proclaim to the world that indeed, the Philippines is open for business, as evidenced by the conduct of Philippine economic briefings in various countries around the globe. This is to make our country an investment destination. More investments mean more opportunities for quality jobs for our people.
Responsive 2024 budget
The President’s resolute commitment to creating a better quality of life for Filipinos is demonstrated by the swift adoption of the 2024 National Expenditure Program (NEP), proving that our agenda for prosperity would continue.
We have crafted a budget that reflects our determination to pursue economic and social transformation to address the long-term effects of the pandemic and the impact of inflation by prioritizing shovel-ready investments in infrastructure, human capital development, sustainable agriculture, and food security, among others.
Yesterday, a day after the SONA, we turned over the NEP to the Office of the President. In the first week of August, the NEP will be submitted to Congress for deliberations. With this, we are hoping for speedy yet circumspect review and approval from our honorable legislators so as to continue the projects and programs to benefit our people.
Priority legislative measures
For the President, only a whole-of-government and whole-of-society approach will enable us to achieve what we have set out to do.
Thus, he appealed to Congress to pass his priority legislations, namely: 1) Essential tax measures under our Medium-Term Fiscal Framework, including the excise tax on single-use plastics, VAT on digital services, rationalization of mining fiscal regime, the motor vehicle user’s charge/road user’s tax, and the military and uniformed personnel pension; 2) Amendment of the Fisheries Code; 3) Amendment of the Anti-Agricultural Smuggling Act; 4) Amendment of the Cooperative Code; 5) New Government Procurement Law; 6) New Government Auditing Code; 7) Anti-financial accounts scamming; 8) Tatak-Pinoy (Proudly Filipino) Law; 9) The Blue Economy Law; 10) Ease of paying taxes; 11) LGU income classification; and 12) The Philippine Immigration Act.
These priority measures aim to contribute in building an investments-friendly environment that will provide more jobs and strengthen the economy; provide efficient and responsive government and public services; promote transparency, and accountability; and ensure the safety, security, and overall well-being of our fellow countrymen.
Toward the ‘Bagong Pilipinas’
The DBM fully supports President Marcos, as the administration starts its second year, and as he pronounces the dawning of the “Bagong Pilipinas,” a country that is fully developed, and clean, with technology-driven government services, modern transportation, bountiful sustenance at every table; homes, businesses, and companies powered by affordable and renewable energy in communities where peace and order reign and every child attends school.
Beyond budget, the President’s SONA should be viewed as the beginning of what the government, together with its people, can achieve. The operational word is “together.” Thus, as we go on with our daily lives, we must also act collectively as a nation. Let us join the President and his administration in the fight for sustainable and inclusive progress to realize the Bagong Pilipinas.
(Amenah F. Pangandaman is the current Secretary of the Department of Budget and Management.)