Department of Finance (DOF) Secretary Ralph G. Recto said the government will work on collecting tax revenues to match the economic growth relative to the country's gross domestic product (GDP).

During a Senate committee hearing, Recto said that the two main tax agencies should work hard to boost efficiency to increase tax collections by 11.8 percent annually to outpace the roughly 8.7 percent average increase of nominal GDP every year from 2024 to 2028.

Over the medium term, the government expects revenues to grow by an average of 10.3 percent per year, while revenues as a percentage of GDP will also increase from 16.1 percent in 2024 to 17.0 percent in 2028.

“These projections took into account the additional revenues from the refined revenue reforms of the DOF, which we recalibrated to ensure that they do not place undue burdens on the taxpayers,” he said.

Disbursements, on the other hand, are expected to grow by an average of 7.4 percent and remain at about 21.1 percent of the GDP.

“With higher government revenue collections and improved expenditure management, our fiscal deficit is projected to drop from 5.6 percent in 2024 to 3.7 percent by 2028,” Recto said.

In the first six months of the year, total revenues grew by 15.6 percent to P2.15 trillion, wherein bulk came from the Bureau of Internal Revenue and Bureau of Customs totaled P1.84 trillion, which is 10 percent higher than in 2023, on the back of digitalization efforts.

“This robust revenue performance placed us among Asia’s top revenue-to-GDP ratios at 17.1% for the first half of the year. And this is above our full-year target of 16.1 percent,” the Finance chief said.

Expenditures also grew by 14.6 percent, reaching P2.76 trillion, while the expenditure-to-GDP stood at 21.9 percent in the first half of the year.

Recto also assured that the government is continuously managing the country’s debt according to the highest standards of fiscal discipline.

The gross financing stands at 61 percent of the full-year goal of P2.57 trillion, including the landmark $2 billion global bond issuance last May, which is one of the government’s most affordable and cost-effective borrowing costs.

The DOF also strategically favors long-term obligations to reduce our reliance on short-term debt and minimize rollover risks, with long-term debts constituting 79.8 percent of the country’s total portfolio.

Recto also said that the government's total outstanding debt should not be a cause for concern as the country’s economy is large enough to allow the government to generate without difficulty the resources needed to meet its debt obligations.

“[U]nder this, we have ensured that every peso to be collected or borrowed will be stretched to deliver the biggest bang per buck for the Filipino people,” he said.

The finance chief stressed that government spending will continue to prioritize education, infrastructure, food security, social protection, and national security to support the country’s growth momentum.

“We will make sure that our spending is managed carefully and that every penny collected will be returned to the people,” he said.