The BGA Philippines Team, led by Managing Director Victor Andres Manhit, wrote an update to clients on the Philippines’ 2025 budget deliberations.

Context

  • The Philippine Congress began its deliberations on the proposed 2025 national budget in August. Given the country’s ongoing economic growth over the past two years under the administration of President Ferdinand Marcos Jr., the outcome will be critical in sustaining the country’s economic momentum next year. Congress is expected to finalize the budget and Marcos to approve it by the end of 2024.
  • The Philippine economy has shown stability and resilience as the Marcos administration enters its third year. However, challenges such as inflation must be addressed to maintain continued growth.

Significance

  • With the start of the budget season on July 29, Congress is actively reviewing the Department of Budget and Management’s (DBM) proposed PHP 6.4 trillion ($113 billion) national budget for 2025. Known as the National Expenditure Program, the proposal is 10 percent higher than the approved 2024 budget of PHP 5.8 trillion ($102.6 billion).
  • The DBM allocates the largest share of the proposed 2025 national budget to the social services sector, with PHP 2.1 trillion ($37.7 billion), or 33.4 percent of the total. Economic services follow, receiving 29.2 percent of the budget, amounting to PHP 1.9 trillion ($33 billion). General public services is set to receive 17.1 percent, or PHP 1.1 trillion ($19.3 billion), and defense has been allocated PHP 419.3 billion ($7.5 billion), representing 6.6 percent. The DBM earmarked PHP 876.7 billion ($15.6 billion), or 13.8 percent, to tackle the debt burden.
  • Education and public works remain the government’s top priorities in 2025. The education sector is set to receive the highest budget of PHP 977.6 billion ($17.4 billion), a PHP 8.7 billion ($154.7 million) increase from the previous year. The public works sector will receive PHP 900 billion ($16 billion), slightly less than its 2024 allocation. This budget will fund public infrastructure projects, including roads, bridges, flood management facilities and academic buildings.

Implications

  • The government sets spending priorities for the 2025 budget to support the administration’s goals for economic, social and national security. Key themes include developing and protecting the capabilities of individuals and families, transforming production sectors to generate more quality jobs and competitive products and creating an enabling environment.
  • The government’s identification of priority expenditures signals growth opportunities for businesses in 2025. Companies are encouraged to align their strategies accordingly and explore areas for collaboration and expansion.

We will continue to keep you updated on developments in the Philippines as they occur. If you have any questions or comments, please contact BGA Philippines Managing Director Victor Andres Manhit at vmanhit@bowergroupasia.com.

Best regards,

BGA Philippines Team

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Managing Director

Dindo is recognized as one of Manila’s most well-connected and savvy advisors on developments in government and business in the Philippines. Concurrent to his role as managing director for BGA’s operations in the Philippines, he is also the founder and managing director of the Stratbase Group and president of its policy think tank, the Albert del Rosario Institute for Strategic and International Studies. Since 1991, Dindo has served as a member of the faculty and is the former chair of the Political Science Department and a senior fellow of the La Salle Institute of Governance at the De La Salle ... Read More