While the Philippine tax effort—tax collections as a share of gross domestic product (GDP)—stood below the Asia-Pacific (APAC) average, the country outpaced most of its Southeast Asian peers.

According to the Paris-based Organisation for Economic Co-operation and Development’s (OECD) Revenue Statistics in Asia-Pacific 2026 report, the Philippines’ tax-to-GDP ratio clocked in at 18.1 percent in 2024, falling just short of the regional average of 19.7 percent.

However, the Philippines’ performance remained significantly stronger than the Association of Southeast Asian Nations (ASEAN) average of 14 percent.

Specifically, the Philippines posted a higher ratio than Vietnam (17.2 percent), Thailand (17.1 percent), Singapore (13.4 percent), Malaysia (13 percent), Laos (12.7 percent), Cambodia (12.5 percent), and Indonesia (11.8 percent). Within the broader regional context, only the high-income East Asian economies of Japan (33.7 percent) and South Korea (25.3 percent) truly dwarfed the Philippine figure.

However, the country’s fiscal flexibility remains constrained by a restrictive local tax system. Per the OECD’s assessment, local governments in the Philippines operate under a “narrow range of taxes under their jurisdiction, relying mainly on property taxes and taxes on income and profits.”

OECD data showed that in 2024, the central government generated 79.4 percent of the general government’s total revenue, followed by social security funds at 15.2 percent, and sub-national governments at just 5.4 percent. This stands in sharp contrast to jurisdictions like Japan and South Korea, where sub-national governments enjoy the authority to tax a much broader range of economic activities.

Despite these local limitations, the Philippines holds a unique advantage in non-tax income. The OECD found that the Philippines was the “only economy in APAC where other property income accounted for the largest share, at 45.3 percent of non-tax revenue.” Of the ₱722.7 billion in non-tax revenues collected in 2024, ₱327.3 billion came from this stream, which primarily consists of earnings generated by the Bureau of the Treasury (BTr) from government financial assets, investments, and treasury operations.

Looking ahead, the Philippines is expected to see a rise in its official tax efficiency metrics as statistical reporting methods are refined. The OECD noted that the country's value-added tax (VAT) Revenue Ratio is “currently underestimated as the VAT revenue collected at Customs is not accounted for in total VAT revenue in this publication.”

The report explained that this specific revenue cannot currently be distinguished from other import duties and is classified under general taxes on specific goods and services. Future data disaggregation by the Bureau of Customs (BOC) could therefore lift the country’s standing among its regional peers regarding consumption tax efficiency.

Furthermore, the Philippines is actively expanding its tax reach by capturing revenue from the digital economy, having recently implemented mechanisms to collect VAT on inbound digital supplies and services.

These efforts cap off a decade of substantial growth in revenue capacity. Between 2014 and 2024, the Philippines emerged as a regional leader in expanding the fiscal resources available per citizen.

“Tax revenue per capita more than doubled in thirteen economies: Maldives, Georgia, Azerbaijan, Mongolia, China, Armenia, Viet Nam, Philippines, Marshall Islands, Nauru, Cambodia, Bangladesh and Kiribati,” the report noted.

While this per-capita growth signals a stronger state capacity to fund public services, infrastructure, and social programs—likely reflecting rising incomes and heightened economic activity—it could conversely point to a heavier tax burden on local individuals and businesses if tax rates continue to climb.