Reforms in the government’s budget process could significantly improve the country’s chances of achieving the coveted “A” rating status, the Department of Budget and Management (DBM) said.
Budget Secretary Amenah F. Pangandaman explained that the Public Financial Management (PFM) Reforms Roadmap 2024-2028 would enhance the government’s budgeting processes and strengthen the nation’s credit rating.
Pangandaman noted that while positive economic indicators—such as employment rates, growth, inflation, foreign direct investment, and foreign exchange—are encouraging, these metrics alone are not sufficient to secure an “A” credit rating.
She stressed the critical need to strengthen governance frameworks to achieve this objective.
"This [roadmap] is part of our governance and bureaucratic efficiency and reform, which is also one of the crucial components of our road to 'A' [credit rating],” Pangandaman said.
“Andyan na, ang gaganda na ng mga numbers [There it is, the numbers will be improving]. We just have to solidify that—employment rates, our GDP [gross domestic product] growth, inflation—everything. We have already put in place how to go about it," she added.
Pangandaman further explained that the roadmap enhances governance by promoting greater efficiency, transparency, and accountability in the management of public funds.
This approach will not only solidify the country’s economic gains but also bolster the credibility and stability necessary for achieving a higher credit rating, she said.
In August 2024, Japan-based Rating and Information Inc. (R&I) upgraded the Philippines' credit rating to A-, an improvement from the previous year’s BBB+ rating.
The roadmap outlines key initiatives that align planning, budgeting, and auditing processes across government agencies, ensuring more efficient public service delivery and fiscal responsibility.
Pangandaman noted that 13 activities under the roadmap have already commenced, focusing on areas such as Planning and Budget Linkages, Cash Management, Public Asset Management, and Digital Public Financial Management (PFM).
"We’ve started rolling out ‘Digital PFM’ like the Budget and Treasury Management System (BTMS) in five major departments This will accelerate budget processing, procurement, and implementation, improving our ability to meet our deficit-to-GDP targets," she said.
The comprehensive PFM strategy also ensures a streamlined approach in disaster risk reduction and management (DRRM), procurement, and local government financial management, all major elements in building investor confidence and securing better credit standing for the country.
Another fundamental component is capacity development, with the DBM consistently delivering training to government personnel nationwide.
“[As for] capacity development, we’ve been doing it. We’ve trained from national to local government units, more than 7,000 across the country. And hopefully we’ll have our own PFM institute, which the President mentioned earlier, to make it more coherent,” she said.
The PFM Reforms Roadmap 2024-2028 is aligned with the broader economic reform agenda, reinforcing the country's macroeconomic stability. (Derco Rosal)