The BGA Philippines Team, led by Managing Director Victor Andres Manhit, wrote an update to clients on the Philippine’s national budget proposal for fiscal year 2024.

Context

  • The Philippine Department of Budget and Management on August 2 submitted the national budget proposal for fiscal year 2024 to the House of Representatives. Themed the “Agenda for Prosperity: Securing a Future-Proof and Sustainable Economy,” the budget amounts to PHP 5.8 trillion ($104.6 billion). This is equivalent to 21.7 percent of the gross domestic product and 9.5 percent greater than the 2023 General Appropriations Act, which totaled PHP 5.3 trillion ($95.6 billion).
  • The proposed budget will fund the government’s operations and its pursuit of economic reforms embodied in the Philippine Development Plan (PDP) 2023-2028, which is aligned with the administration’s Eight-Point Socioeconomic Agenda. The Medium-Term Fiscal Framework, which sets clear and measurable macroeconomic and fiscal targets, serves as the foundation of the Philippines’ economic transformation.

Significance

  • The social services sector will receive the largest allocation of PHP 2.2 trillion ($39.7 billion), followed by the economic services sector — which covers communications, roads and other transport; agriculture and agrarian reform; trade; and industry — amounting to PHP 1.7 trillion ($30.7 billion). In line with the administration’s flagship infrastructure program, the Build Better More Program, the bulk of the budget for this sector will be earmarked for roads and other transport infrastructure, such as projects under the Asset Preservation Program, Network Development Program, Rail Transport Program and Aviation Infrastructure Program.
  • General public services will receive PHP 893.3 billion ($16.1 billion), 15.5 percent of the total budget, and PHP 699.2 billion ($12.6 billion) has been allocated to address the country’s debt burden. The defense sector will receive PHP 282.7 billion ($5.1 billion) to support the land, air and naval forces defense programs and other initiatives to ensure domestic security.

Implications

  • Businesses should watch for new investment opportunities and partnerships that could come from the Marcos administration’s economic reform initiatives, as Congress is expected to begin its deliberations on the proposed budget later this month. In particular, companies can look forward to more investment opportunities across a wide range of sectors, such as infrastructure development. Key government programs geared toward digitalization are expected to promote the ease of doing business and bureaucratic efficiency and help improve the Philippines’ overall business climate.
  • President Ferdinand “Bongbong” Marcos Jr.’s budget message, which outlined the administration’s funding allocations and budget priorities for fiscal year 2024, identified the ease of doing business as a key goal under the PDP. An improved business climate could promote the Philippines as a top investment destination. To enhance bureaucratic efficiency and good governance, the administration has pursued reforms geared toward digitalization, restructuring government agencies and offices and building competence within the government and among public servants.

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