BEYOND THE BUDGET

Assalamu alaikum wa Rahmatullahi wa Barakatuh.
 

I was privileged to join fellow economic managers during the Philippine Economic Briefing (PEB) held in Tokyo, Japan on June 21, 2024. With me were Special Assistant to the President for Investment and Economic Affairs Secretary Frederick Go, Finance Secretary Ralph Recto, Socioeconomic Planning Secretary Arsenio Balisacan, Trade and Industry Secretary Alfredo Pascual, and Transportation Secretary Jaime Bautista, among others.

Japan has been our trusted development partner, supporting numerous projects funded by the Japan International Cooperation Agency. Thus, we, in the economic team, gladly engaged with Japanese business and financial communities and media.

Themed “PH On-the-Go: Fast-Tracking Economic Progress,” I believe that the event was a success as we were well-received by around 500 PEB attendees, attaining our objective of highlighting the state of our economy and the efforts of the administration of President Ferdinand R. Marcos Jr. (PBBM) to spur our country's economic growth as well as promote investment opportunities.

As one of the panelists in PEB Tokyo, I discussed our budget priorities, spending performance, and top reforms. As you may know, under PBBM’s leadership, our country is propelling progress through the prudent and judicious use of the 2024 national budget amounting to ₱5.768 trillion. This is equivalent to 21.8 percent of the gross domestic product (GDP) and is 9.5 percent higher compared to 2023. Our primary expenditure direction continues to be anchored on the Eight-Point Socioeconomic Agenda and the Philippine Development Plan 2023–2028. Meanwhile, the top three sectors that received the biggest chunk of our budget pie were the social services sector at ₱2.116 trillion (36.7 percent), the economic services sector at ₱1.775 trillion (30.8 percent), and the general public services sector at ₱898.6 billion (15.6 percent).

The budget for the social services sector is geared to revitalize education with ₱983.5 billion; provide quality healthcare with ₱322.3 billion; and strengthen social protection with ₱449.1 billion. Further, our government demonstrated its determination to ensure food security by allocating ₱235.06 billion for the agriculture and agrarian reform sectors, an amount significantly higher by 26 percent than the ₱186 billion in the previous year.

Meanwhile, our government is reducing transport and logistics costs by maintaining high investments in infrastructure at 5.0 to 6.0 percent of GDP annually. For 2024, we allocated ₱1.510 trillion to the Build-Better-More Program, equivalent to 5.7 percent of the budget, and higher by 13.5 percent than last year's. Also, the bulk of the 2024 infrastructure budget went to physical infrastructure, such as road networks, flood control infrastructure, and railway systems; and social infrastructure, such as irrigation systems, health facilities, and school buildings. 

In addition, we have pieces of good news that will help create a climate conducive to business. Private sector participation is now faster and easier with the new Public-Private Partnership (PPP) Code and the recent signing of its Implementing Rules and Regulations. This is significant as, out of 185 infrastructure flagship projects approved by PBBM, 42 big-ticket projects will be undertaken through PPPs.

To respond to challenges posed by climate change, we have allocated ₱457.41 billion for climate change adaptation and mitigation initiatives. Ensuring that our budget is not only sustainable but also inclusive, the Bangsamoro Autonomous Region of Muslim Mindanao was allocated with ₱80.6 billion this year to realize its high growth potential.

Additionally, in our bid to transform our country digitally, we have provided a total budget of ₱64.6 billion for ICT projects, 159.1 percent higher compared to its budget last year. The government is also going digital by investing in the necessary information systems, consistent with the adoption of the Integrated Financial Management Information System (IFMIS) under Executive Order (EO) No. 29. Toward this objective, DBM is developing a Digital Transformation Roadmap that promotes data governance and digitalization in fiscal-related government processes and addresses cybersecurity concerns.
Also worth mentioning are other key transformational reforms such as the institutionalization of the Philippine Open Government (PH-OGP) through EO 31, which provides an avenue for the interface between the government and citizens; upskilling public financial management (PFM) practitioners through the PFM Competency Program; and the eventual implementation of procurement reforms through the New Government Procurement Act, which is already for the signature of the President. I truly believe these reforms will address the government's underspending woes.

With these efforts, I wholeheartedly agree with Sec. Recto when he aptly pointed out, “We are committed to working non-stop until good becomes better and better becomes the best for business.”

On the sidelines of the PEB, we met with Japanese companies’ top executives and business leaders to discuss investment and business expansion opportunities in the Philippines. We aim to leverage Japan's advanced technical and technological expertise and seek partnerships to develop the country's agriculture, manufacturing, energy, and infrastructure sectors.

We also met with senior officials of the Japanese credit rating agency Rating and Investment Information Inc. (R&I) to provide an update on the Philippines’ promising growth story and other key developments, and present the case for a credit rating upgrade. Last August 2023, the agency affirmed the Philippines’ high credit grade rating of BBB+ with a positive outlook. This affirmation reflects confidence in the country's sound economic policies and means more accessible financing for the government's development programs, benefiting all Filipinos.

Beyond budget, the PBBM administration believes that to achieve the Bagong Pilipinas — the Philippines filled with new and better opportunities — we need to work with the private sector and our international business partners. In showcasing our vigorous growth initiatives, we are letting the world know that our country is stable, conducive to, and open for business. 

Hence, we invite not only our Japanese partners but other business communities from around the world to come to the Philippines. Together, let’s accomplish our mutual development objectives through respect, trust, cooperation, and binding friendship.

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