Organized by the Bangko Sentral ng Pilipinas’ Investor Relations Group (BSP-IRG) and the Philippine Embassy and Philippine Trade and Investment Center in Washington, D.C., in cooperation with the Department of Finance (DOF)
Ambassador Romualdez, ladies and gentlemen, good afternoon to all of you.
First, I would like to thank the Philippine Embassy and the Philippine Trade and Investment Center for inviting us to share our insights on the Philippine economic outlook, the proposed Fiscal Year 2023 National Budget, as well as the important updates on the structural reform initiatives by the Marcos Jr. administration in pursuit of our Agenda for Prosperity.
Let me just share a common observation that we’ve seen the past days during our road shows, trade shows, and infra roadshows: optimism about the Philippine economy. This is not without basis. Businesses, consumers, and the government all agree that the Philippines is on track towards a strong recovery.
But we are all aware of the continued external challenges to recovery and economic transformation. Hence, we have prepared and designed our policies and programs to address these concerns.
The Medium-Term Fiscal Framework was previously presented by Secretary Diokno. Thus, the proposed budget for 2023 is consistent with the MTFF.
The 2023 Budget, which was recently been approved by our Lower House and will now be deliberated on by our Senate, has been designed to meet our Agenda for Prosperity.
The proposed budget for next year will amount to Php 5.268 trillion or roughly USD 92 billion, which is Php 244.4 billion or 4.9 percent higher than this year’s budget, and is equivalent to 22.2 percent of GDP.
To achieve these goals in the MTFF, the Marcos Jr. Administration also crafted an 8-Point Socioeconomic Agenda. On the part of the Department of Budget (DBM), the Fiscal Year 2023 Proposed Budget is tailor-fit according to the 8-point socioeconomic agenda and these priorities.
Social and human development expenditures, together with the aggressive increases in agricultural spending, corner 34.3 percent of the proposed national budget. Adding the remaining hard and soft infrastructure spending also gives room for the government to allocate at least 40 percent of its budget for these priority sectors.
To ensure constant food supply and food security, at least Php 160.7 billion or USD 2.72 billion or 3.1 percent has been allocated for direct intervention more for logistics and wider agricultural road networks.
Specific to the Agriculture sector, we gave an unprecedented boost of 39.2% year on year and allocated Php 184.1 billion or USD 3.12 billion.
Focused as well on economic growth, we will also build on the gains of the Build, Build, Build program, now we call Build, Better, More program—BBM.
Spending for the program is within the target and consistent with the MTFF—5 to 6 percent of the GDP from now until 2028.
Towards this end, we have increased the budget for Infrastructure Development. In particular, transportation allocation increased by 120.4 percent, from Php 75.8 billion or USD 1.28 billion in 2022 to Php 167.1 billion or USD 2.83 billion in 2023. We are working hard to achieve the Philippines’ first subway, as well as more busways for the commuting public.
The government will also invest heavily in expanding and improving the digital infrastructure in the country, to ensure a digitally enabled workforce and leverage on world-class and smart social infrastructures.
In fact, for 2023, some Php 12.47 billion or USD 218.77 million of the budget will be provided for information and communications technology, digitalization programs, and projects of the government. This includes allocation for the digital transformation programs of the Department of Finance (DOF) and its attached agencies, namely Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC), which are expected to improve the revenue collection in the country.
Towards economic transformation, we are committed to investing in our people through major social and human development expenditures.
Education, a constitutionally mandated priority in the Philippines, receives the highest budgetary allocation with Php 852.8 billion or USD 14.47 billion or 15.8 percent of the proposed FY 2023 budget.
We have also allocated some 9.7 percent or at least Php 512.26 billion or USD8.69 billion for Social Protection to ensure that no one would be left behind. With this budget, we continue to provide social assistance, especially in times of crisis such as natural disasters and we aim to address malnutrition, especially among children.
Finally, following our lessons learned from the COVID-19 pandemic, we have given the Health sector at least Php 298.97 billion or USD 5.075 billion or 5.7 percent of the budget to ensure the capability to prevent and withstand sickness and malnutrition.
We aim to strengthen the health workforce and, in line with the socioeconomic agenda for inclusivity, to provide health care and health facilities in the farthest regions of the country that are often neglected.
Alongside all of these budgetary allocations, we have a budget reform agenda. Foremost is the digitalization of the economy with the roll-out of the Budget and Treasury Management System or the BTMS in all agencies. We will likewise enhance bureaucratic efficiency through institutionalization of our Cash Budgeting System.
Through these efforts and initiatives, we aspire to provide every Filipino a fighting chance to manage life’s uncertainties and achieve their full potential.
We are working hard towards economic transformation that would be felt by every individual, family, and business in the Philippines.
We hope you will join us in our journey towards economic transformation by investing in the Philippines. On our part, we are providing our investors with a conducive regulatory environment to make your time and investments in the Philippines worthwhile.
Let us all be partners in pursuit of economic transformation and our agenda for prosperity.
Maraming salamat at Mabuhay!
