Thank you for this opportunity to brief the Senate about our fiscal position.

It feels good to be back in these halls, which served as my second home for decades. Whereas before, I would be excited to see what advocacies of mine have been funded in the budget, now I dread doing the same.

This is so because I am now the government’s chief fundraiser. It is us in the DOF who must raise the money to build the roads that connect us, to ensure every Filipino has access to quality education and healthcare, to secure our food supply, and to create opportunities for all to dream bigger.

In a word, we fund the nation’s progress and bring us closer to our Ambisyon 2040—a prosperous middle-class society future where poverty is eradicated.

But before we begin to discuss how we intend to fulfill our duty over the medium term, let us first take a step back and look at where this administration began.

For our fiscal outlook can only be fully understood within the context of the circumstances we inherited, and the global trends that heavily influence our course forward.

So allow me to provide these briefly.

To start with, this administration came at a time when we needed to rescue an economy flatlined by the pandemic.

Bumagsak ang ating ekonomiya ng 9.5%—pinakamababa mula World War II. And the past administration left us with a massive debt of 12.8 trillion pesos.

And against this backdrop, we navigate an ocean of global uncertainties. Nariyan ang Russia-Ukraine war, El Niño, Israel-Gaza war, Israel-Iran war, geopolitical tensions with China, a cold war, and now, the rise of trade wars.

Around the time we crafted the first Medium-Term Fiscal Framework in 2022, the world still hoped for a smooth post-pandemic recovery.

But these geopolitical tensions interrupted this recovery.

That is why, when I took on the Finance Secretary hat, my first move was to recalibrate our growth and fiscal targets.

We now review these targets regularly to keep them attainable, realistic, and adaptive to global headwinds, while staying firmly anchored on sustainable growth.

Our refined fiscal program now charts a realistic path to reduce our deficit and debt, while creating more jobs, raising incomes, and lifting millions of Filipinos out of poverty along the way.

And crucial to this is ensuring that every peso collected or borrowed by the DOF will be stretched to deliver the biggest bang per buck for the Filipino people.

To put it into perspective, the 2025 national budget stands at 6.35 trillion pesos. Of which, only 4.64 trillion pesos are supportable by revenues.

Ibig sabihin, ang gastusin ng gobyerno ay aabot sa 17.40 bilyong piso kada araw. But only 12.72 billion pesos per day will be financed by revenue collections. Monday to Sunday. Every 24 hours. Kada bente kwatro oras.

At nagpapasalamat po kami sa ating mga taxpayers—lalo na sa ating middle class—para sa kanilang sipag, tiyaga, at ambag para umasenso ang ating bayan.

And against the herculean task of funding a gargantuan budget, the DOF also needs to scout for more resources without inflicting new taxes or bequeathing debts to be paid by future generations.

That is why the DOF hiked GOCCs’ dividend rates to 75% from 50%, which is now one of our major sources of non-tax revenues. And that is why we are privatizing more underutilized government assets.

The BIR and BOC have also stepped up with higher collection performances through digitalization, strict enforcement, and plugging of leakages in the tax system—especially from e-commerce.

So far, we are on track to meet our targets, with revenue collections growing by double digits for the last three years at an average of 13.8% annually.

Tax collections have also consistently expanded at an average of 11.5% annually.

In fact, in 2024, we achieved a revenue effort of 16.7%—the highest in the last 27 years.

We are also on course to meet our fiscal program for the year, having already achieved half of our targets.

As of mid-year, our tax collections continued to post double-digit growth, totaling 2.03 trillion pesos. This is 10.7% higher than last year.

This robust performance placed us among Asia’s top revenue-to-GDP ratios at 16.7% for the first half of 2025.

Our expenditures also grew by 9.5% in the first half of the year, reaching 3.03 trillion pesos.

Meanwhile, our fiscal deficit for the first half stood at 765.5 billion pesos, within our mid-year target.

As a percentage of GDP, our deficit remains manageable at 5.7% for the first semester. Our full-year target is 5.5%.

With tax collections projected to grow by an average of 10.2% annually from 2025 to 2028, total revenues are on track to hit nearly 6 trillion pesos by the end of the President’s term. By 2030, our total revenues will hit 7 trillion pesos.

This means that we are asking the BIR and BOC to work harder and boost efficiency at a faster pace.

Our projections also took into account the additional revenues from recently enacted reforms, including the VAT on digital services and the Capital Markets Efficiency Promotion Act.

We also expect more revenues from the Rationalization of the Mining Fiscal Regime, and explore the possibility of having a General Tax Amnesty.

With higher government revenue collections and improved expenditure management, our fiscal deficit is projected to drop from the pandemic high of 8.6% in 2021 to 5.5% in 2025 and down to about 4% by 2028. It will further drop to around 3% by 2030.

And crucial to this is ensuring that we prevent wasteful expenditures.

Kaya naman, kami sa DOF, ay mariiing nagkukundena sa mga anomalya sa mga flood control projects, na inimbestigahan ng ating Pangulo at ng Senado.

Raising revenues is no joke. Tapos makikita mo lang na hindi ito napupunta sa mga tamang proyekto at sa kapakanan ng taong bayan, yung iba naging multo pa.

Dahil sa mga ghost projects, nawalan po ang ating ekonomiya ng 42.3 bilyon hanggang 118.5 bilyong piso mula 2023 hanggang 2025. Katumbas po nito ang 95,000 hanggang 266,000 na trabaho na sana’y napakinabangan ng ating mga kababayan.

That is why we fully support the President’s directive to closely scrutinize the national budget.

We prepared the NEP with the President to ensure that the projects to be funded in 2026 have the highest multiplier effect. Walang ghost projects dapat. Walang kurapsyon. Walang sayang na piso.

In the DOF, we always champion two crucial principles.

Una, i-kalkula nang mabuti ang revenue target, kasi ang expenditures ay hindi naman open bar sa isang restaurant, tapos ang bill ibibigay sa tax collecting agencies.

Pangalawa, spend taxes well, because if we demand a receipt for goods sold, the people are also entitled to the resibo of government projects financed by the taxes they paid.

For good spending is the best way to encourage tax compliance.

People are naturally resistant to taxes. But their tax obedience can be won if they will see how the taxes they paid are spent for the right things, at the right price, by the right agency, at the right time.

That is exactly why we are allocating funds to where it matters most: 5% to 6% of GDP for infrastructure spending, 4% of GDP to education, and roughly 4% of GDP to health, agriculture, and social welfare to uplift the lives of Filipinos.

We also continue to manage our debt according to the highest standards of fiscal discipline. For we are very vigilant not to max out the Philippine national credit card.

What people need to understand is that when the Marcos, Jr. administration took over in 2022, minana po namin ang 12.8 trillion pesos na utang ng mga nakaraang administration.

And we are still repaying these large debts incurred during the pandemic, while continuously investing in our people.

And even with this, we are making improvements on our debt metrics.

If you compare it with our neighbors, our debt is relatively lower than that of most countries in Asia.

Japan’s total debt is at 485.94 trillion pesos; India’s at 116.84 trillion pesos; Singapore’s at 53.68 trillion pesos; South Korea’s at 46.89 trillion pesos; Indonesia’s at 31.37 trillion pesos; and Thailand’s at 17.73 trillion pesos.

We are in the middle of the pack in terms of our national government debt and general government debt-to-GDP ratios, which calculate our ability to pay.

About 69% of our outstanding debt is domestic. Kaya hindi po kayo dapat mabahala, dahil ang utang na ito, galing po sa sarili natin.

Ibig sabihin, karamihan ng interes na ating binabayad ay napupunta rin lang bilang dagdag na kita ng ating mga kababayan.

We also strategically favor long-term obligations to reduce our reliance on short-term debt.

And we will continue to adopt a borrowing mix in favor of local sources to take advantage of domestic liquidity and mitigate foreign exchange risks.

Overall, we will make sure that the economy will continue to outgrow the country’s debt to ensure our ability to pay for our obligations.

If we strictly adhere to our Medium-Term Fiscal Program and maintain efficient spending, the size of the economy is projected to reach 42.6 trillion pesos by 2030, while keeping our debt at 24.7 trillion pesos, equivalent to 58% of GDP. This is well within sustainable levels.

And you have every reason to be confident that we are managing our obligations prudently, that our financing strategy is clear.

In fact, global credit rating agencies affirm this. This is the reason why we earned a credit rating upgrade from R&I, an outlook upgrade from S&P, and consistently high grades from other international agencies like Moody’s and Fitch.

They see what we are seeing: strong macroeconomic fundamentals, prudent debt management, high growth potential, moderate debt burden, and a stable banking system.

As I wrap up my presentation, let me assure the honorable members of the Senate that we are making good, steady progress on our economic goals. And the impact of our policy decisions is now being felt.

Around the world, inflation is expected to average 4.2% this year. But in the Philippines, we already brought it down to just 0.9% in July.

The global economy is forecasted to grow by only 3% this year. But the Philippines is expected to expand at almost twice that pace.

In fact, for the last three years since President Marcos, Jr. took office, we grew at an average of 5.9%, among the fastest in Asia.

Considering the heavy debt we inherited, the higher policy rates, and the global headwinds from geopolitical tensions and trade wars, growing by 5.9% is no small feat.
This is the highest among the past administrations, second only to the Aquino III administration, which started with a lighter debt load.

We are also creating more jobs than ever. Since we took over in 2022, we have created roughly 6 million jobs on average, the highest compared to the past administrations.

From just 33 million employed in 2006, we now have a record 50.5 million Filipinos at work, and 31.8 million of them have formal, stable jobs. Ibig-sabihin, patuloy na lumalakas ang ating middle-class.

As opportunities grow, so too does our consumer market, our people’s quality of life, and our fight against poverty. By 2030, inaahasan na ang Pilipinas ay magiging 13th largest consumer market in the world.

In 2023, we have already lifted 2.5 million Filipinos out of poverty since the pandemic. And we will make sure to lift 8 million more Filipinos out of poverty by the end of the President’s term. This means dropping our poverty rate to single digits, or 9%.

This is the be-all and end-all of all our efforts. As this is the definitive indicator that our growth has translated into real improvements in the lives of Filipinos through more and better jobs, higher levels of education, and healthier lives.

But we cannot achieve this all on our own. Kailangan po namin ang tulong, gabay, at suporta niyo sa Senado.

To the honorable members of the Senate, the 2026 proposed budget of 6.793 trillion pesos that you will enact will help us get there.

So let’s ensure that it is a budget that works as hard as the people who fund it—the taxpayers.

Let us operate within the parameters of the Medium-Term Fiscal Program that reduces our deficit and debt gradually, creates jobs, increases income, and decreases poverty.

And above all, let us never lose sight of our core mission: to deliver on the promise of a better life that every Filipino rightfully deserves under Bagong Pilipinas.

Maraming salamat po. Mabuhay ang Bagong Pilipinas!

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