In line with President Ferdinand R. Marcos, Jr.’s directives from his last State of the Nation Address (SONA), the Department of Finance (DOF), under the leadership of Secretary Ralph G. Recto, has taken decisive steps to ensure prudent fiscal and economic management in order to deliver gains that directly benefit the Filipino people.
Anchored on the Medium-Term Fiscal Framework (MTFF), the DOF is steadfast in its mission to bring down the deficit and debt-to-GDP ratios, create more quality jobs, increase household incomes, and reduce poverty to single digits by 2028.
PH is among the fastest-growing economies in Asia
The Philippine economy has expanded by an average of 5.9% since the Marcos, Jr. administration took office in 2022, making it one of the fastest-growing economies in Asia.
In the first quarter of this year, the Philippines ranked second to Vietnam (7.0 percent), matching China’s performance (5.4 percent) and outpacing its ASEAN neighbors, including Indonesia (4.9 percent), Malaysia (4.4 percent), Singapore (3.8 percent), and Thailand (3.1 percent).
Labor force participation is at an all-time high
As of May 2025, the number of Filipinos in the labor force has reached an all-time high of 52.33 million. Wage and salary workers continued to comprise the majority of employed individuals, reaching 31.6 million.
As a result, the unemployment rate dropped to 3.9% in May, bringing the average for 2025 down to 4.0% and outperforming the government’s target range of 4.8% to 5.1% for 2025.
Prices remain stable, especially for low-income households
This strong labor performance is reinforced by the continued easing of inflation. The Marcos, Jr. administration has made every effort to shield every Filipino from the effects of inflation, especially low-income households.
In June 2025, the inflation rate for the poorest households dropped below zero to -0.4%, the lowest since the pandemic.
Rice, once the main culprit behind rising prices, saw a historic decline of 14.3% in June 2025—the sharpest drop recorded since 1995.
Overall inflation is now down to 1.4% with a year-to-date average of just 1.8%, settling comfortably below the government’s 2% to 4% target range.
PH achieves highest revenue effort in 27 years, on track with fiscal consolidation
In 2024, the DOF was able to collect PHP 4.4 trillion in revenues, exceeding its PHP 4.3 trillion target, without imposing new taxes. The revenue effort reached 16.72% of GDP—the highest in 27 years.
From January to June 2025, total revenues reached PHP 2.26 trillion, 5.15% higher year-on-year. Tax collections continued to post double-digit growth, reaching PHP 2.03 trillion or 10.74% more than last year’s level.
Under the DOF’s watch, GOCCs continue to maintain their solid fiscal position, strengthening their role in national development. As of July 14, 2025, 54 GOCCs have contributed PHP 106.17 billion in dividends.
The top five contributors were the Landbank of the Philippines (LANDBANK); the Bangko Sentral ng Pilipinas (BSP); the Philippine Amusement and Gaming Corporation (PAGCOR); the Philippine Deposit Insurance Corporation (PDIC); and the Power Sector Assets and Liabilities Management (PSALM).
The DOF also revised its privatization guidelines to expedite the disposition of non-performing public assets, which will allow the national government to collect additional non-tax revenues.
Deficit and debt remain at manageable and sustainable levels
The country’s fiscal deficit has been steadily narrowing, dropping to 5.7% of GDP in 2024—a significant improvement from the pandemic peak of 8.6% in 2021. This is on track to decline to about 4% by 2028.
Furthermore, despite inheriting a significant debt burden from the past administration of PHP 12.79 trillion, the government has brought down the debt-to-GDP ratio to 60.7% in 2024 through prudent debt management.
Meanwhile, in comparison to our ASEAN counterparts and other emerging market economies, the Philippines’ debt is positioned comfortably within the median range, having a General Government (GG) debt-to-GDP ratio of 57.1% in 2024.
With the economy continuing to grow faster than its debt obligations, the government is on track to reduce the national government debt-to-GDP ratio to within 60% by the end of the President’s term.
Concessional, strategic, and transparent financing for the Build Better More Program
The borrowings are heavily invested in growth-enhancing investments, such as infrastructure, education, agriculture, health, and social services that produce more jobs for the Filipino people.
Since the start of the Marcos, Jr. administration, the DOF has signed 39 financing agreements to fund priority projects in infrastructure, transport, maritime safety, health, digital innovation, and agriculture. These include the Metro Manila Subway, the country’s first-ever underground railway system; the Bataan-Cavite Interlink Bridge Project; Samar Pacific Coastal Road II Project; the Laguna Lakeshore Road Network Project; the New Dumaguete Airport Development Project; the Maritime Safety Capability Improvement Project Phase III; and the Infrastructure for Safer and Resilient Schools Project, among others.
The DOF also secured grants from development and bilateral partners for high-impact projects in climate resilience, peace and development, water security, and AI-powered agricultural systems, among others. Grants are aids given by development partners with no obligation for repayment.
PH sustained high credit ratings, proof of strong investor confidence
The country’s prudent fiscal management is affirmed by consistently high credit ratings for the Philippines by international debt watchers.
This earned the Marcos, Jr. administration its first-ever credit rating upgrade of A minus from the Rating and Investment Information, Inc. (R&I) and an outlook upgrade to Positive from Standard and Poor (S&P) in 2024.
This year, Fitch Ratings’ affirmed the Philippines’ ‘BBB’ credit rating with ‘Stable’ outlook, while the Japan Credit Rating Agency, Ltd. (JCR) affirmed its high ‘A-’ credit rating and stable outlook, citing the steady progress of the Marcos, Jr. administration’s economic agenda.
These credit rating achievements keep borrowing costs low for the Philippines, allowing the government to channel more resources into infrastructure, education, and poverty alleviation programs.
Laws passed to boost investments, create jobs, and generate revenues
The Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act transformed the Philippines into an attractive business destination by making the tax incentives regime more globally competitive, investment-friendly, predictable, and accountable.
There are currently 182 approved projects under CREATE MORE, with PHP 90.13 billion in committed investment capital. This is expected to create more than 40,000 jobs.
The Value-Added Tax on Digital Services Act was also enacted, which is a long-overdue measure that levels the playing field between local and foreign digital service providers.
For the next five years from the law’s effectivity, 5% of the collected revenues will be used exclusively for the local creative industries’ development to foster innovation and empower the next generation of Filipino creators and entrepreneurs.
To support the Marcos, Jr. administration’s commitment to accessible education, all digital educational services—including courses, webinars, and e-learning platforms—remain VAT-exempt.
Meanwhile, the VAT Refund Mechanism for Non-Resident Tourists Act creates a modern, efficient, and transparent refund system to boost tourism and spur consumer spending. This aligns the country with international best practices and enhances the Philippines’ competitiveness as a travel destination.
Finally, the Capital Markets Efficiency Promotion Act (CMEPA) makes the Philippine capital market regionally competitive and empowers ordinary Filipinos to start investing their hard-earned money to build a better future.
What these economic gains mean for the people
Behind these figures and reforms is the ultimate goal of cutting poverty incidence to a single digit or 9% by 2028.
As of 2023, the poverty rate fell to 15.5%, surpassing pre-pandemic levels and government targets. This translates to 2.5 million Filipinos lifted out of poverty.
With inflation easing, employment rising to record highs, the deficit and debt on a downward path, and revenues increasing, the government is optimistic that 8 million more Filipinos will be lifted out of poverty by the end of the President’s term.
The DOF stands ready to support the President’s economic agenda and is committed to making every peso work for the Filipino people.
