The government wrapped up its final leg of the Philippine Economic Briefing (PEB) for the year in Iloilo City–situated in the fastest-growing region in the Philippines–where key government officials outlined the Marcos, Jr. administration’s strategies to achieve inclusive and sustainable economic transformation.

PEBs serve as a platform for key economic officials to brief local and international business and financial communities on the latest developments concerning the country’s economic performance, investment opportunities, and the Marcos, Jr. administration’s development plan.

The PEB in Iloilo was held on December 11, 2023 with the theme, “Agenda for Prosperity: Economic Transformation toward lnclusivity and Sustainability.”

During the first panel discussion on A Fast-Growing and Forward-Looking Economy, Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona, Jr.; Department of Budget and Management (DBM) Secretary Amenah F. Pangandaman; Department of Finance (DOF) Chief Economic Counsellor Undersecretary Zeno Ronald R. Abenoja; and Philippine Chamber of Commerce & Industry (PCCI) Western Visayas Regional Governor Jobert A. Peñaflorida discussed key updates on the country’s economic development agenda.

Undersecretary Abenoja highlighted the government’s Medium-Term Fiscal Framework (MTFF) which was crafted by the economic team led by Finance Secretary Benjamin E. Diokno within the Marcos, Jr. administration’s first month in office.

The MTFF showcases the government’s commitment to pursuing fiscal consolidation to ensure that sustainability is given priority in the management of national government finances.

At the core of the Framework are the two fiscal strategies: improving revenue generation and boosting government spending.

Key reforms to improve revenue generation under the MTFF are the Real Property Valuation Reform (RPVAR), the Passive Income and Financial Intermediaries Taxation Act (PIFITA), imposition of value-added tax (VAT) on digital service providers (DSPs), tax on pre-mixed alcohol, and excise tax on single-use plastics (SUPs).

This also includes additional measures such as the rationalization of the mining fiscal regime, excise tax on sweetened beverages and junk food, and the motor vehicles road users tax.

In his keynote message, House of Representatives Speaker Ferdinand Martin G. Romualdez expressed his commitment to respond to the policy demands of the economy, citing the House’s readiness to pass bills in record time.

To help improve government spending, the Marcos, Jr. administration commits to maintain infrastructure spending at 5.0 to 6.0 percent of gross domestic product (GDP) annually until 2028.

Under the President’s Build Better More program, the government is investing in 197 infrastructure flagship projects (IFPs), amounting to about PHP 8.7 trillion.

These high-impact investments will unlock greater economic productivity, enhance the ease of doing business, and generate more, and quality jobs for Filipinos.

According to Secretary Pangandaman, the national government has already spent roughly 98 percent of the PHP 5.2 trillion budget for Fiscal Year (FY) 2023, which includes expenditures for infrastructure projects.

For the FY 2024 budget, Secretary Pangandaman shared the priority sectors which include the Build Better More infrastructure program with an allocation of PHP 1.42 trillion; Human capital development through social services (PHP 2.18 trillion); Sustainable agriculture and food security (PHP 197.8 billion); Climate change adaptation and mitigation (PHP 543.5 billion); Digital transformation (PHP 38.75 billion); and Support to local government units (PHP 1.008 trillion).

The Budget Secretary also announced that there will be an increase in the national tax allotment in the Visayas region by 6 percent from PHP 50.9 billion to PHP 54.15 billion next year.

On the state of the economy, Undersecretary Abenoja said that the Philippines has performed well in terms of GDP growth which averaged 5.5 percent in the first three quarters of the year, better than its regional peers.

Growth was driven by domestic demand such as consumption, investment, and government spending.

The economic expansion was broad-based with support from the services, industry, and agriculture sectors.

The Philippines’ impressive economic performance contributed to the decline of the country’s debt-to-GDP ratio which is now down to 60.2 percent as of end-September 2023, compared to 63.6 percent in the same period a year ago.

Inflation has also been steadily declining from a high of 8.7 percent in January 2023, down to 4.1 percent in November 2023, averaging 6.2 percent year-to-date (YTD).

Aside from monetary measures, Undersecretary Abenoja said supply shocks were addressed by direct measures to mitigate food and non-food inflation recommended by the Inter-agency Committee on Inflation and Market Outlook (IAC-IMO), which is co-chaired by the DOF and National Economic and Development Authority (NEDA).

The country’s robust growth has also contributed to better labor market conditions.

Just last week, the Philippine Statistics Authority (PSA) announced that the Philippines’ unemployment rate further dropped to a historic low of 4.2 percent, a sharp decline from the pandemic rate of about 18 to 19 percent and better than the pre-pandemic level of around 5 or less than 5 percent.

These observations were shared by top credit rating agencies which all affirmed the Philippines’ credit ratings and stable outlook, citing robust near-term and medium-term growth forecasts for the country as well as its stable fiscal position and macroeconomic conditions, said Undersecretary Abenoja.

From the private sector’s perspective, PCCI Regional Governor Peñaflorida shared that agriculture, fishery, and tourism are the major growth drivers in Western Visayas–the fastest-growing region in the Philippines in 2022 with an economic expansion of 9.3 percent.

According to him, the private sector seeks to push for more incentives towards green investments in sustainable power and energy, as well as physical and digital infrastructure to support the growing Information Technology Business Process Outsourcing (IT-BPO) sector.

For the BSP’s part, Governor Remolona shared that the Central Bank is collaborating with the payments industry to launch new innovative payment streams and policies to support Filipinos’ digital transformation in the new economy.

The PEB’s second panel discussion focused on Building Better and Smarter for the Future and was participated by Department of Transportation (DOTr) Secretary Jaime J. Bautista; Department of Information and Communications Technology (DICT) Secretary Ivan John E. Uy; Department of Energy (DOE) Undersecretary Giovanni Carlo J. Bacordo; Public-Private Partnership Center Assistant Secretary Eleazar E. Ricote; Department of Public Works and Highways (DPWH) Region VI Director Sanny Boy O. Oropel; and Iloilo Business Club, Inc. Vice President Ma. Luisa C. Segovia.

Meanwhile, Department of Agriculture (DA) Undersecretary Mercedita A. Sombilla; Department of Education (DepEd) Undersecretary Wilfredo E. Cabral; Department of Trade and Industry (DTI) Undersecretary Ceferino S. Rodolfo; Department of the Interior and Local Government (DILG) Undersecretary Marlo L. Iringan; Department of Tourism (DOT) Undersecretary Shereen Gail C. Yu-Pamintuan; Department of Labor and Employment (DOLE) Assistant Secretary Paul Vincent W. Añover; and PCCI Iloilo Chapter, Inc. President Fulbert C. Woo led the discussions during the third panel discussion which tackled plans to reinvigorate, accelerate, and transform the Philippine economy.