To the members of the School of Economics of the University of Asia and the Pacific headed by Dean Dr. Peter Lee U, our partners in the academe and the economic community, my colleagues from the Department of Budget and Management or DBM, and our dear participants, good afternoon.

Assalamu alaikum wa Raḥmatullahi wa Barakatuh.

First, I would like to thank the UA&P School of Economics for the opportunity to engage with the economic community and be part of the discussion on our economic landscape, and of course, on pathways to our aspired economic growth and development. Events such as this Midyear Business Economics Briefing are avenues that connect us to people, empowering them to engage more in our country’s economic affairs. Furthermore, Fiscal Management for Sustained Economic Growth—more than being the theme of this event—is also closely related to our mandate in the DBM.

Ensuring sound fiscal management, including the improvement of the tax regime, is outlined as one of the goals in the Philippine Development Plan (PDP) 2023 to 2028 identified to ensure a stable macroeconomic environment.

At the beginning of the term of President Ferdinand R. Marcos Jr., the Economic Team proposed its comprehensive fiscal strategy, the Medium-Term Fiscal Framework or the MTFF, which serves as the country's blueprint specifically for fiscal deficit reduction, promotion of fiscal sustainability, and enabling robust economic growth, while the country recovers from the COVID-19 pandemic.

Under the MTFF, the National Government aims to:

• Achieve a 6.5 to 8.0 growth from 2023-2028;
• Reduce poverty rate to single-digit or by 9.0 percent by 2028;
• Reduce deficit-to-GDP ratio to 3.0 percent by 2028;
• Bring down the debt-to-GDP ratio to less than 60 percent by 2025;
• Maintain high investments in infrastructure at 5.0 to 6.0 percent of GDP annually; and
• Attain upper-middle-income status or at least $4,256 gross national income per capita.

The good news: we are very much on track with the objectives of the MTFF and our Agenda for Prosperity. The Philippines’ Gross Domestic Product or GDP for the first quarter of 2023 was 6.4 percent. And, from the third quarter of 2022 to the first quarter of 2023—the time that the current administration got to work—our growth on average was actually 7.1 percent.

Just this month, we also conducted the second Philippine Economic Briefing in Singapore and I am very glad to share with you that the Philippines is among the top ten nations of interest for Singapore investors and Singaporeans. We are determined that foreign investments and continued strong bilateral relations will help us in achieving our goals under the MTFF.

Despite global headwinds, the country grew the fastest among other emerging and developing countries such as Indonesia, China, and Vietnam. This is also within the 2023 growth target set by the Development Budget Coordination Committee or the DBCC, which is at 6.0 to 7.0 percent.

On the fiscal side, we remain on strong footing. Revenue projections in the medium term are expected to improve from Php 3.73 trillion in 2023 to Php 6.62 trillion in 2028, through the implementation of revenue-generating measures over the medium term. Meanwhile, disbursements from 2023 to 2028 are revised upwards and are sustained above 20 percent of GDP, reaching Php 5.23 trillion in 2023 and expanding to Php 7.77 trillion in 2028.

We also maintain our commitment to fiscal sustainability by adhering to the target deficit for the period 2023 to 2028, which shall progressively decline from 6.1 percent of GDP in 2023 to 3.0 percent of GDP in 2028.

To ensure that we do not neglect socioeconomic objectives even as we achieve high-growth performance and meet the targets of the MTFF, the priorities of the PBBM Administration have been aligned with the 8-point Socioeconomic Agenda and the PDP 2023 to 2028, which include as objectives food security, improved transportation, affordable and clean energy, health care, social services, revitalized education, sound fiscal management, and bureaucratic efficiency.

Our National Budget is also aligned with these objectives. Thus, the Social Services sector—comprising Education and Health—has been given the highest budget allocation with Php 2.0 trillion or 38.0 percent of the FY 2023 National Budget, while the Economic Services has been given the second highest share with Php 1.62 trillion or 30.8 percent as the government continues to push for infrastructure development.

Meanwhile, we acknowledge the competing demands of government programs against a backdrop of limited resources and fiscal space. Hence, to ensure efficiency in meeting the targets set in the Administration’s MTFF, only high-impact and implementation-ready projects will be included in the budget in the succeeding years.

The present administration also recognizes the vital contribution of the private sector in attaining our aspired economic growth; thus, we will utilize Public-Private Partnerships in financing our priority programs, especially those concerned with infrastructure and climate solutions.

In addition, our proposed sovereign wealth fund, which will give the Philippine economy the momentum to move forward as a tried and tested investment vehicle, was ratified by the Senate last May 30. Meanwhile, the Bicameral Conference Committee Report was adopted by the House of Representatives the next day. As we have said in a Joint Statement with my fellow economic managers released on June 13, the Maharlika Investment Fundis not only beneficial but necessary at this point in time. It is an investment for the future that we need to start building now as the Philippine economic outlook remains robust amid the global economic slowdown.

Alongside these initiatives, we also have legislative reforms to promote transparency, efficiency, and responsiveness in public service, foster a conducive investment climate in the Philippines, and ultimately, sustain our economic growth.

On our end at the DBM, we have been continuously lobbying and working for the passage of the Progressive Budgeting for Better and Modernized Governance or PBBM Governance Bill, which aims to streamline the processes of delivering programs and services across all government offices through an Integrated Financial Management Information System (IFMIS). This bill also seeks to institutionalize the Cash Budgeting System (CBS) and other Public Financial Management (PFM) reforms to ensure the timely implementation of programs and projects. Just this month, the President issued Executive Order No. 29 directing the full adoption of IFMIS in government agencies to improve bureaucratic efficiency and ensure the efficient delivery of quality services to the public.

We will also be launching our Digital Transformation Roadmap which promotes data governance and digitalization in fiscal-related government processes. I believe that we need to fully embrace and transition to digitalization, especially if we want to have a more efficient PFM system in the country. That is why, digital transformation is at the core of the Department’s reform agenda.

The COVID-19 pandemic and the circumstances that we have experienced in the past years have challenged us to sustain the country’s economic recovery. Despite this, we remained steadfast in fulfilling our mandate and continued to deliver and surpass our targets—together.

There are many facets to fiscal management, but for our endeavors to be successful, we need to aspire and work together. To all the professionals, experts, and economists present today, I hope you will join us in our journey toward an economic transformation that is inclusive and sustainable for all generations.

Thank you very much. Wabillahi Tawfiq Wal Hidaya, Wasalamu alaikum wa rahmatullahi wa Barakatuhu.