“We are on track with our fiscal consolidation plan under the refined Medium-Term Fiscal Framework that reduces our deficit and debt gradually in a realistic manner, while creating more jobs, increasing our people’s income, and decreasing poverty in the process. And we are making good steady progress on our economic goals.”
This was the remark of Finance secretary Ralph Recto during Wednesday’s Kapihan sa Manila Bay forum as he discussed the progress of the agency’s Medium-term Fiscal program which aims to improve revenue and economic level, while gradually lessening the country’s debt rate.
Recto presented the targets achieved under the fiscal consolidation plan, including gradual decline in deficit and debt rate, increasing available jobs and adjusting the income, without putting additional tax pressure on Filipinos to fund these programs.
“[So] for the first six months of the year, nakolekta na natin mahigit… o almost 50% ng target natin for the entire year. So its really implementing the budget–‘yon ang pinakamalaking tool na gamit ng ating pamahalaan. Ang budget natin sa taong ito—P5.7 trillion—ibig sabihin, nagagastos natin ng tama kung kaya’t…at maganda [i]yong pagparte ng budget, kung kaya ‘yong ating ekonomiya ay lalong lumalago, at nabibigyan ng trabaho ‘yong mga kababayan natin, at nababawasan ang kahirapan,” he said.
During the first quarter of 2024, DoF recorded a 15.6 % increase in total revenue collection amounting to P2.15 trillion, tax colection rate grew by 10% to P1.84 trillion value, as well as the 63.3% increase in non-tax collection amounting to P314.2 bllion.
In terms of the gradual decrease in debt, as targeted by the fiscal program, Recto assured that despite the increase in the outstanding debt of the national government, its results will still be in benefit of the country.
“Majority or 68.3% of our total borrowings are in Philippine pesos, kaya hindi po kayo dapat mabahala dahil ang utang na ito, galing po sa sariling atin. Ibig sabihin, karamihan ng interes na ating [i]binabayad ay napupunta rin bilang dagdag na kita ng ating mga kababayan. At kung mukha mang patuloy na lumalaki ang ating utang ngayon, in nominal terms, patuloy naman na lumalago ang ating ekonomiya,” Recto noted.
He expressed confidence that the country can pay its obligations, given that the debt-GDP (Gross Domestic Product) ratio has swelled down to 60.1% last year compared to the 60.9% during the pandemic.
Additionally, the agency is determined to lessen it further to 60%, which will guarantee an enough cash buffer or reserve fund for the country if there will be another crisis, similar of the 2020 pandemic.
Recto also noted that aside from the allocation under the 2025 national budget, the government uses these debts to spur the growth of economy through investing on more infrastracture and human capital development projects that contributes the highest multiplier effect in the economic growth.
“Ginagamit po natin ito sa tamang paraan para mas palaguin ang ating ekonomiya, upang lumikha ng mas maraming trabaho, magbigay ng mataas na kita para sa ating mga kababayan, at makakolekta ng mas maraming pondo para sa mga programa ng ating pamahalaan. Nagsimula na nga rin po ang deliberasyon para sa 2025 National Budget na P6.352 trillion na mas makakapaghatid ng mas maraming benepisyo para sa taong-bayan,” he stressed.
RECTO ON RICE PRICE AND INFLATION, EMPLOYMENT, POVERTY RATE, LOAN AGREEMENTS
Meanwhile, despite the higher inflation rate in July, Recto is confident that this rate is still manageable and is only temporary as there is an expected base effect on rice prices.
“The idea is to increase productivity. Alam natin it takes time para maitaas natin yung produksyon ng bigas, halimbawa…kailangan mas mahabang panahon pa. Kung kaya’t binawasan na rin natin ‘yong taripa ng bigas. Kaya sa mga darating na buwan, inaasahan natin, pababa na ang presyo ng bigas,” Recto added.
The secretary also pointed out progress in creating more jobs following a decrease in the number of unemployed and underemployed Filipinos, as well as the recorded all-time high gross national income per capita and the allevation of poverty rate in the country.
“Ibig sabihin nito, makakaasa tayong mas tataas ang kabuuang kita ng bawat Pilipino. At ang pinaka-importante sa lahat, naiangat po natin sa kahirapan ang mahigit 2.5 milyong Pilipino noong 2023, kaya bumababa ang ating poverty rate sa 15.5%. Kung maiangat po natin ang 10 milyong Pilipino mula sa kahirapan sa susunod na apat na taon, maa[a]bot natin ang target na pababain ang poverty rate sa 9% by 2028,” Recto explained.
In line with this, the agency is set to continue programs and activities with the aim to further attain goals of the fiscal consolidation program, including more investment projects via international loans and partnership agreements like the Dumaguete airport to be built in partnership with South Korea.