BEYOND BUDGET
Assalamu alaikum wa Rahmatullahi wa Barakatuh.
During the 13th National Economic and Development Authority (NEDA) Board Meeting last Jan. 26, 2023, NEDA presented the Philippine Development Report 2023 (PDR 2023) to President Ferdinand R. Marcos Jr. (PBBM). The PDR 2023, an evidence-based report, is a comprehensive overview of the progress in implementing the Philippine Development Plan's (PDP's) 2023-2028 transformation agenda, evaluating the country's performance, and providing updates on the President’s legislative agenda. As NEDA Secretary Arsenio Balisacan noted, “This report presents the lessons we have learned, and outlines plans of action to ensure we remain on track to meet our goals by 2028.”
Thus, I laud the NEDA for producing the PDR 2023, for I believe this report is crucial in updating our people on the status of the country vis-à-vis our goals. Further, it serves as a major reference document for government agencies in crafting policies and implementing plans, programs, projects, and activities.
The PDP 2023-2028, approved and adopted on Jan. 27, 2023, under Executive Order (EO) No. 14, contains our nation’s transformation agenda, which includes accelerating digital transformation, improving connectivity, strengthening the interlinkages between the agricultural and industrial sectors with the services sector, establishing a dynamic innovation ecosystem, intensifying public-private partnerships, and enhancing the role of local government units (LGUs) as partners in development. It aims to return the nation to its high-growth trajectory and enable economic and social transformation for a prosperous, inclusive, and resilient society. I agree with the President when he said during the PDP Forum last year, “The plan represents not only our aspirations as a people but also our resolve to build a nation that we can all be truly proud of.”
Further, EO 14 directs a whole-of-government approach to the PDP’s and the Public Investment Program's adoption, dissemination, and implementation, with the Department of Budget and Management (DBM) providing the necessary budget support for their implementation, monitoring, assessment, and updating.
According to PDR 2023, our economy continues to thrive, with a 5.6 percent expansion in the fourth quarter (Q4) of 2023 and a 5.6 percent Gross Domestic Product (GDP) growth rate for the full year. NEDA pointed out, and I wholeheartedly agree, that though this growth is less than our target of six percent to seven percent for 2023, it nevertheless maintains our ranking as one of Asia’s fastest-growing economies. We are following Vietnam (6.7 percent) but have outpaced China (5.2 percent) and Malaysia (3.4 percent).
The economic figures in 2023 support the policies and initiatives in the PDP 2023–2028. To mention a few, I am happy to note that our national government deficit-to-GDP ratio declined to 5.7 percent in the first three quarters of 2023 from 6.5 percent in September 2022. This is within our full-year target of 6.1 percent and is a result of better revenue and spending performance. We have also managed to moderate inflation rates, with headline inflation declining from 8.7 percent in January 2023 to 2.8 percent this January 2024 — the lowest since the 2.3 percent inflation rate recorded in October 2020 — and food inflation decreasing from 11.2 percent to 3.3 percent. Our economic expansion reflected a robust labor market with unemployment rate averaging at 4.5 percent for January to November 2023. Meanwhile, the country’s poverty incidence decreased from 23.7 percent in the first semester of 2021 to 22.4 percent in the same period of 2023, which translates to almost 900,000 fewer Filipinos living in poverty. The country also moved up in the Global Innovation Index, from 59th out of 132 countries in 2022 to 56th place in 2023.
Further, the PDR 2023 identified the need for the government to aggressively promote trade and facilitate strategic investments in growth drivers while addressing underspending; ensure the availability, accessibility, and affordability of food; improve access to quality education and recover learning losses; build sustainable and well-planned communities through stronger collaboration among government agencies, LGUs, and the private sector; and enhance the digitalization of government processes to make goods and services more responsive and accessible to the public.
On the part of the DBM, aside from aligning this year’s national budget with the PDP 2023-2028, which prioritizes the social and economic services sectors, the PDR will be used in crafting the Budget Priorities Framework to set the national expenditure priorities for the next fiscal year.
Moreover, to ensure the implementation of an efficient and inclusive budget system guaranteeing the timely conduct of procurement, award of contract, and project implementation, we are pursuing the passage of the proposed amendments to the Government Procurement Reform Act and the implementation of the Modernized Philippine Government Electronic Procurement System or mPhilGEPs. We will also strengthen the capacity of our local government Public Financial Management (PFM) practitioners to promote an efficient PFM system and sound fiscal management. In addition, we are pushing for the enactment of the Progressive Budgeting for Better and Modernized (PBBM) Governance Bill to institutionalize an efficient Cash Budgeting System, other key PFM and digitalization reforms, as well as the National Government Rightsizing Program to enhance bureaucratic efficiency.
Beyond budget, the PDR 2023 is an essential tool to assess our progress in attaining our national goals. Our experience last year has made us realize how critical it is to further strengthen our fiscal position to sustain inclusive and rapid growth in the years to come. Thus, rest assured that we, in the PBBM administration, are unwavering in the pursuit of our transformation agenda, moving quickly to institute reforms that will change the game and making sure that all government policies and programs are in line with our shared goal of achieving a Bagong Pilipinas.
(Amenah F. Pangandaman is the Secretary of the Department of Budget and Management.)