The government has significantly ramped up its budget utilization in the first six months of 2024, surpassing initial projections, the Department of Budget and Management (DBM) said on Thursday.
In a Palace briefing, DBM Principal Economist Joselito Basilio said that actual spending exceeded the Development Budget Coordination Committee (DBCC) targets by a substantial margin of P24.6 billion due to accelerated program and project implementation.
“Overall, spending this year is about 14 percent higher compared to last year,” Basilio said.
“This means that some programs and projects have been accelerated and started earlier this year," Basilio added.
Several government agencies contributed to the increased spending. The Department of Public Works and Highways (DPWH) expedited its road network infrastructure program through early procurement activities, allowing for immediate project implementation upon budget release.
“They had already bid out their road infrastructure projects before January 1, so when the budget was released on January 1, the implementation of the projects started immediately,” Basilio explained.
The Department of National Defense (DND) also boosted its spending on the modernization program while the Department of Social Welfare and Development (DSWD) improved its 4Ps program with a cleaner beneficiary list, resulting in faster disbursements.
Meanwhile, the Commission on Elections (Comelec) has commenced spending for the upcoming local and national elections in 2025.
Basilio emphasized that these developments indicate a more efficient and effective utilization of government funds.
In the same briefing, Basilio said the government will rely heavily on tax collections to fund the P6.352 trillion national budget for 2025.
He revealed that revenues are projected to reach P4.6 trillion, with tax collections accounting for P4.3 trillion. This includes an estimated P3.2 trillion from the Bureau of Internal Revenue (BIR) and a historic high of P1.064 trillion from the Bureau of Customs.
To bridge the gap between income and expenses, the government will borrow P1.537 trillion, resulting in a deficit equivalent to 5.3 percent of the projected Gross Domestic Product (GDP) for 2025.
This figure aligns with the economic managers’ revised medium-term fiscal program.
While the deficit will lead to a slight increase in the national debt from P15 trillion to around P17 trillion by the end of 2025, DBM Secretary Amenah Pangandaman assured the public that the government is on track to manage the debt situation.
"Although the nominal debt figure seems large, international standards focus on the debt-to-GDP ratio," Pangandaman said. "This ratio is decreasing, and with our fiscal consolidation efforts, we expect it to continue falling."
The government aims to reduce the debt-to-GDP ratio to below 60 percent by 2026 or earlier. Currently, it stands at 60.2 percent and is projected to decrease to 60.1 percent next year.
Basilio explained that increasing tax collections and GDP growth will help in lowering the debt-to-GDP ratio. However, the government will need to accelerate debt payments due to higher interest rates.
Both officials emphasized that the government's fiscal consolidation measures will be crucial in achieving the debt reduction targets and ensuring the country's economic stability.