Secretary of Finance
August 18, 2025
Thank you for this opportunity to brief the House of Representatives about the national government’s fiscal position.
But before we begin to talk about where we are heading, let us first look back 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 interest ay kulalang mga 650 billion 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. Supply chains were disrupted. Food and fuel prices surged. Inflation soared.
In response, central banks tightened interest rates, tempering global growth expectations.
Just like every other country, we feel the weight of these global pressures.
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.
Because fiscal goals rise and fall with growth targets. Setting them unrealistically high in uncertain times risks revenue shortfalls. This would widen the deficit and force us to borrow more.
To be clear: tempering these targets is not lowering our ambition. It is sound fiscal discipline. It shows confidence in our ability to deliver, and the wisdom to pace ourselves so we can finish strong.
Our refined Medium-Term 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 under this, we have ensured that every peso collected or borrowed 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.
So, against the herculean task of funding a gargantuan budget, we needed 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 MTFF 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 revenue 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.
Moreover, we expect more revenues from the soon-to-be-enacted Rationalization of the Mining Fiscal Regime Act.
The DOF is also exploring the possibility of having a General Tax Amnesty this year.
Disbursements, on the other hand, are expected to grow by an average of 6% and remain above 20% of the GDP.
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.
That is why we fully support the President’s directive to closely scrutinize the national budget.
We prepared the National Expenditure Program with the President to ensure that the projects to be funded in 2026 have the highest multiplier effect.
For instance, we are allocating 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.
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.
And that is exactly what this administration is doing—putting every peso where it matters most: education, health, agriculture, and infrastructure and digital connectivity.
These investments will create more jobs, raise incomes, and pull more Filipinos out of poverty.
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; 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 also 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. Currently, long-term debts constitute about 82% of our total portfolio.
We will continue to adopt an 80:20 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. This will ensure that we have the ability to pay for our obligations.
If we strictly adhere to our Medium-Term Fiscal Program and maintain disciplined and efficient spending, the size of the Philippine 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.
They see what we are seeing: strong macroeconomic fundamentals, prudent debt management, high growth potential, moderate debt burden, and a stable banking system.
They know our growth story is strong, our fiscal consolidation is working.
We are determined to stick to our Medium-Term Fiscal Program by exercising the highest level of fiscal prudence.
As I wrap up my presentation, let me assure the honorable members of the House of Representatives that we are on track with our fiscal consolidation plan across the board.
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. This is the direct result of our whole-of-government approach to address high food prices.
The global economy is forecasted to grow by only 3% this year. But the Philippines is set to expand at almost twice that pace, keeping us among the fastest-growing nations in the world.
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.
And if we can grow by 6% to 7% annually for the next decade, we will be able to double the size of the Philippine economy. Ibig sabihin, ang kinikita ng bawat Pilipino, dodoble din.
Now, I’d like to draw your attention to this slide, because it explains a lot of what we are dealing with today.
Considering the heavy debt we inherited, the higher policy rates, and the global headwinds from geopolitical tensions and trade wars, we are still growing at a respectable 5.9%. 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 as of June, and 31.8 million of them have formal, stable jobs.
Both unemployment and underemployment are also on a steady decline. These are clear signs that job quality is rising.
But we will not rest until we provide more high-quality paying jobs for our people.
As opportunities grow, so too does our consumer market, our people’s quality of life, and our fight against poverty.
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 Kongreso.
To the honorable members of Congress, we are already seeing the Bagong Pilipinas we promised. And it will not be built by plans alone, but by the budget you will pass in this chamber.
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.
As we begin the deliberations for the NEP, let us all together carefully choose projects in the budget that deliver the biggest growth and economic benefits for our people.
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.
And so when history looks back, it will see that the Marcos, Jr. administration left the country in a better shape, stronger than we received it.
Maraming salamat po. Mabuhay ang Bagong Pilipinas!
