Finance Secretary Ralph G. Recto underscored the Department of Finance’s (DOF) key role in funding the nation’s progress despite operating on a relatively modest annual budget.

“Ang DOF po ang ating Pambansang Fundraiser. Trabaho namin na makalikom ng pondo para punan ang mga pangangailangan at pangarap ng bawat Pilipino,” he said during the DOF proposed 2026 budget briefing in the Senate on October 14, 2025.

“We fund the nation’s progress and bring us closer to our Ambisyon 2040—a prosperous middle-class society, where poverty is eradicated,” the Finance Chief added.

Delivering more with less

With only a PHP 27.94-billion budget in 2024, the DOF and its attached agencies collected a record PHP 4.42 trillion in revenues to support the government’s PHP 5.925 trillion expenditure —equivalent to 16.7% of GDP, the highest in 27 years.

This meant the DOF had collected roughly PHP 12.10 billion a day in 2024 to support the PHP 16.23 billion daily expenditures of the government.

These revenues funded, among others, the education for 24.54 million public school students, provided medical assistance to approximately 6.4 million patients in public hospitals, and supported PHP 871.38 billion in local government funding.

Over the past three years, revenue collections have grown by double digits, averaging 13.8% annually, as a result of the Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC) enhanced tax administration efforts through digitalization, stricter enforcement, and closing leakages.

The DOF has also maximized non-tax revenues by increasing the government-owned or -controlled corporation’s (GOCCs) dividend remittances and privatizing more idle government assets to raise more resources without imposing new taxes.

A small budget in 2026 for an even bigger task

The DOF’s proposed budget for 2026 amounts to PHP 37.78 billion, only 1.09% higher than the 2025 General Appropriations Act (GAA) level and represents just 0.56% of the PHP 6.793 trillion proposed 2026 national budget.

The amount is very small compared to its herculean task of collecting PHP 13.65 billion a day in revenues and plugging the PHP 4.51 billion deficit per day to support the PHP 18.61 billion daily spending of the government.

To ensure a reliable revenue stream, tax revenues need to grow by 10.2% annually from 2025 to 2028, pushing total revenues to hit nearly PHP 6 trillion by the end of the President’s term. By 2030, total revenues will breach the PHP 7 trillion mark.

As the nation’s needs continue to grow, the Finance Chief notes that proposals to lower the value-added tax (VAT) rate lead to massive revenue losses, resulting in less public services, and may force the government to borrow even for basic operations, such as personnel salaries.

For instance, the entire VAT collection for 2025 of PHP 1.39 trillion can only fund nine months’ worth of payroll, premium, and pension of active and retired government workers.

Likewise, the PHP 576 billion in total excise tax collections would not even be enough to fund the combined PHP 965-billion budget for basic, tertiary, and technical-vocational education programs.

In the medium term, revenue collections will be bolstered by increased administrative efficiency from the BIR and BOC, through continuous modernization and digitalization, robust non-tax revenues, the proposed General Tax Amnesty, and the extension of the Estate Tax Amnesty.

With higher government revenue collections and improved expenditure management, the fiscal deficit dropped 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.

The Finance Chief stressed that if the government strictly adheres to its refined fiscal program and maintains disciplined and efficient spending, the size of the Philippine economy is projected to reach PHP 42.6 trillion by 2030, while keeping debt at PHP 24.7 trillion, equivalent to 58% of GDP.

Impact of policy decisions already being felt

Under President Marcos Jr.’s administration, the economy has grown by an average of 5.9%, one of the highest in the region.

The Finance Chief emphasized that the country is seeing stronger growth ahead, given that the government is addressing the leakages exposed by the recent flood control controversy and building stronger institutions and better governance.

Growth is being supported by low inflation, easing policy rates, strong consumer spending, and a vibrant labor market.

As of August 2025, employment hit 50.1 million, among the highest on record, with more full-time and stable jobs being created. Wage and salary workers accounted for 64.4% of total employment, or 32.3 million Filipinos, most of whom are in private establishments.

With this, poverty incidence has already dropped to 15.5% in 2023, lifting 2.5 million Filipinos out of poverty. By 2028, the government aims to lift 8 million more Filipinos out of poverty, reducing the poverty rate to single digits.