By Tracy Cabrera
EXERCISING strict prudence and sustainability, the Duterte administration is showing a strong economic outlook due to increased government spending that has helped economic activity in the country, budget secretary Benjamin Diokno emphasized at the Philippine Economic Briefing (PEB) held Tuesday, September 18, 2019, at the Banko Sentral ng Pilipinas in Manila.
“As government spending continues to boost economic activity, we have ensured that our expansionary fiscal policy is supportive of government’s development objectives,” Diokno disclosed.
“In fact, with a robust target of 7-8% in the next five years, the Philippine economy is the highest in the ASEAN 5 economies. The growth target is consistent with the projections of global think tanks and is within our reach, considering the rise of public investments in the country,” he added.
Part of the budget secretary’s presentation at the PEB featured the country’s remarkable fiscal performance.
“The revenue effort is projected to increase from 15.7% in 2017 to as high as 17.6% in 2022,” noted the Budget Secretary. “In nominal terms, revenue collection will rise from close to P2.5 trillion in 2017 to as much as P4.6 trillion in 2022,” he stressed.
Similarly, government spending is expected to surge from just over P2.8 trillion in 2017 to as high as P5.4 trillion in 2022.
“With a strategy to keep the deficit at 3.0 GDP in 2018 and eventually to 3.2% in 2019, the strong momentum in infrastructure spending will be sustained,” Diokno said.
He likewise mentioned the massive improvement in government spending which is now credited with fiscal improvements in the country’s gross domestic product (GDP).
“In 2015, government underspending was as high as 12.8%. “We were able to reduce this to as low as 2.9% in 2017,” he revealed.
This impressive improvement in budget utilization is attributed to the DBM’s Budget Modernization Bill (BMB), which features annual cash-based appropriations (ACBA) where goods and services must be inspected, delivered, and paid for in the same fiscal year, subject to an Extended Payment Period (EPP).
“The Budget Modernization Bill, once passed, will enable faster program delivery that will translate to actual programs, activities, and projects that can be enjoyed by the Filipino people,” he declared,“ the budget secretary concluded.