BMI: PH budget deficit projected to narrow in 2024

By Anna Leah Gonzales

April 9, 2024, 3:07 pm

MANILA – The country's budget deficit is projected to decline this year as revenue collection will likely exceed target, a unit of Fitch Solutions said on Tuesday.

In a report released on Tuesday, BMI Research said the Philippine budget deficit will likely narrow to 5.5 percent of gross domestic product (GDP) this year from 6.2 percent of GDP in 2023.

"This narrowing would mark the third consecutive year the budget shortfall shrinks, a reflection of the current administration’s push for fiscal consolidation," the research and financial market analysis firm said.

BMI said the country's debt-to-GDP is also projected to fall to 59.7 percent this year, from 61.1 percent of GDP in 2023, and further decline to 52 percent by 2028,

Philippine economic growth meanwhile is forecast to hit 6.2 percent this year.

Revenues and expenditures

According BMI, revenue collection will "likely overshoot target in 2024 as efforts to broaden tax base gain traction."

Last year, revenue collection reached PHP3.8 trillion, 5.2 percent higher than the original target set by the government.

"We think that this trend will continue over the coming years as policies targeted to broaden the tax base feed. Newly appointed finance chief Ralph Recto pledged to sustain these efforts," BMI said.

For 2024, the government expects revenues to reach PHP4.27 trillion, and rise to PHP6.078 trillion by 2028.

"We think revenue collection will amount to around 16.3 percent of GDP by the end of 2028," said BMI.

For expenditures, BMI said it is projected to average to 20.2 percent of GDP until the end of President Ferdinand R. Marcos Jr.'s term in 2028.

"The current administration has committed to keeping infrastructure spending between 5-6.0 percent of GDP to support a growth rate of 6.5-8.0 percent. Enhancing the infrastructure framework is crucial for the current administration ambitious goal of positioning the Philippines as a leading destination for foreign investment,” BMI said. (PNA)