To our host, led by US-ASEAN Business Council Mission Lead, Senior Vice President and Regional Managing Director Brian D. McFeeters, and Mission Co-Lead and IBM Asia Pacific Vice President Stephen William Braim;
Distinguished leaders and members of the business community;
A pleasant afternoon to all.
Assalamu alaikum wa Raḥmatullahi wa Barakatuh.
First, I express my utmost gratitude to the US-ASEAN Business Council for your invaluable contributions in facilitating dialogue, promoting trade and investment, and enhancing cooperation between the United States and ASEAN nations, including the Philippines. Your assistance and support throughout the decades have truly helped us time and again to achieve, regain, and maintain solid financial footing amid global and domestic challenges.
We do hope to further cement the Philippines’ position as a strategic trading and investment partner of the United States. In spite of our long-standing relationship, there is always a vast headroom for our economic partnership to grow even more extensively, especially over the coming years.
So, allow me to underscore the compelling reasons why strengthening our partnership and investing in the Philippines is the most strategic move US investors and business partners can make.
Sustaining the Country’s Growth Momentum
The Philippines remains a frontrunner among emerging markets in the Asia-Pacific region, with its solid macroeconomic fundamentals and sound policymaking.
In fact, for the first quarter of 2024, the Philippine economy continued to expand by 5.7 percent, the same as Vietnam's, and performed even better than China (5.3 percent), Indonesia (5.1 percent), Malaysia (3.9 percent), and Singapore (2.7 percent), sealing our position as one of the fastest-growing economies in this dynamic region.
Clearly, we have the momentum for growth. Even Multilateral organizations such as the International Monetary Fund (IMF) affirm the resilience of the Philippine economy, giving us the highest growth outlook for 2024 at 6.0 percent among countries with similar credit ratings, such as Indonesia, Thailand, and Malaysia.
Medium-Term Fiscal Program
On the fiscal front, the Philippines remains committed to fiscal consolidation efforts, including cutting the deficit, albeit in a more practical, sustainable, and strategically paced manner. The government’s track record of fiscal prudence, as shown by improvements in the quality of expenditure and relatively modest debt ratios over the past decade, strongly supports our fiscal consolidation process to reduce the deficit gradually.
Attesting to this, the deficit will gradually decline from 5.6 percent in 2024 to 3.7 percent in 2028. This will provide the necessary fiscal space to support the implementation of the government’s expenditure priorities aligned with the 8-Point Socioeconomic Agenda and Philippine Development Plan 2023 to 2028.
FY 2024 National Budget
To support the implementation of the government’s expenditure priorities, the Php 5.768 trillion National Budget for this year was carefully crafted to ensure that programs and projects aligned with the country’s development goals are sufficiently funded and prioritized.
That’s why more than half of the national budget—a total of 67.5 percent—was allocated for social and economic services.
The Social Services sector has received the highest budget allocation since 2007, with Php 2.1 trillion, or 36.7 percent of the national budget for this year. The bulk of this will support programs that promote human capital development by revitalizing education (Php 983.5 billion), promoting quality healthcare (Php 322.3 billion), and strengthening social protection (Php 449.1 billion).
Meanwhile, the Economic Services sector received the second highest allocation, with Php 1.78 trillion, or 30.8 percent of the budget. This allotment will also fund the Agriculture and Agrarian Reform sector with Php 235.06 billion to support the administration’s vision of making agriculture the primary source of our food security.
We will also scale up sustainable and green investments that propel economic transformation for a prosperous and resilient society. As such, Php 457.41 billion has been allocated to support climate change adaptation and mitigation measures aligned with the National Climate Change Action Plan (NCCAP) 2011 to 2028.
Infrastructure Development
Higher investments will also be made in public infrastructure, which is expected to create a multiplier effect on the economy, reduce the cost of doing business, support the creation of quality jobs, and ultimately steer the economy towards sustainable economic growth. Hence, we are determined to maintain infrastructure spending at 5.0 to 6.0 percent of GDP annually until 2028.
For this year, we have allocated 5.7 percent of GDP or Php 1.51 trillion for the Build-Better-More Infrastructure Program. This is intended for the construction and rehabilitation of physical infrastructure such as roads, railways, flood control infrastructure, and buildings all over the country. It is likewise intended for social infrastructure such as school buildings, hospitals and health centers, and water supply and irrigation systems.
Public-Private Partnerships
To fund these critical infrastructure projects, we are currently mobilizing diverse and innovative financing solutions, including strategic co-investments with the private sector through Public-Private Partnerships or PPPs. By partnering with the private sector, we hope to boost financing and harness the sector’s advanced technical expertise in transforming the Philippine economy.
And I am happy to share that private sector participation is now made faster and easier with the recent enactment of the new PPP Code and the recent signing of its Implementing Rules and Regulations. The new PPP Code will further simplify the evaluation process and create a unified system for investors to refer to when engaging in PPP projects.
But even with a simplified evaluation process, the quality and inclusivity of PPP projects will not be compromised. Hence, we have also integrated gender equality, disability, and social inclusion (GEDSI) requirements, as well as climate change and environmental standards, as non-negotiable preconditions for approving PPP projects. This shall ensure that the PPP projects are gender-responsive and climate-resilient.
Attesting to this, we are proud to share that just last March, we signed a Concession Agreement with SMC-SAP & Company Consortium for the Ninoy Aquino International Airport (NAIA) PPP project, making it the first PPP project to be approved since the new PPP Code was passed into law last December. The landmark project also sets the benchmark for efficiency for other pipeline projects as the fastest-approved PPP proposal in Philippine history–evaluated in just six weeks by the national government.
The newly approved PPP project aims to improve the overall passenger experience in NAIA through modernized terminals, optimized airport capacity, and reliable operations. This will enable airport capacity to significantly increase to 62 million passengers per year from 35 million, encouraging tourism and enhancing mobility. This is a testament to the administration’s commitment to promoting world-class air transportation infrastructure.
Aside from the NAIA-PPP Project, we currently have 48 big-ticket infrastructure projects to be undertaken through PPPs. Nonetheless, we have an enticing selection of investment prospects for the private sector, featuring 185 big-ticket infrastructure projects in physical connectivity, water resources, agriculture, health and education, power and energy, and digital connectivity. Rest assured, as we are now under the banner of Bagong Pilipinas, you can expect nothing less than speed and efficiency in the handling of your investments when you partner with the Philippines.
Aside from investing heavily in implementation-ready infrastructure flagship projects, we are also pursuing game-changing budget reforms that promote digital transformation and open governance.
Digital Transformation
To this end, we are determined to fully digitalize and harmonize our Public Financial Management (PFM) systems and policies, beginning with the adoption of the Integrated Financial Management Information System (IFMIS) across all government agencies.
In this pursuit, the DBM, in partnership with the Asian Development Bank, conducted a workshop series and regional consultation workshops dedicated to developing the Philippine PFM Reforms Roadmap 2024 to 2028. This roadmap is targeted to be endorsed to the Office of the President by June 2024.
We will also launch a Digital Budget Management Roadmap, which we will be implementing in a phased manner, starting with Project TINA or the Technical Innovations in the National Expenditure Program (NEP) Application Project, which aims to replace the existing NEP generation tool, resolve pain points across DBM’s Budget and Management Bureaus, and boost operational efficiency. Ultimately, its goal is to create a unified system to automate the budget process between the Executive and the Legislative branches.
This shall be complemented with Project Marissa, which utilizes blockchain technology to enhance the management of critical data such as allotment release orders and other DBM records in public finances.
I am also very proud of the revival of Project DIME or the Digital Information for Monitoring and Evaluation Project, which shall use existing technologies such as satellites, drones, and geotagging to monitor infrastructure projects while encouraging citizen feedback.
On a larger scale, we will harmonize the policies and guidelines in the government's IT activities through Project MITHI, or the Medium-term Information & Communications Technology Harmonization Initiative, in partnership with the Department of Information and Communications Technology and the National Economic and Development Authority.
Procurement Reforms
Moreover, the DBM is also advocating for amendments to the decades-old Government Procurement Reform Act (GPRA) to make public procurement more attuned to the changing times and responsive to the evolving needs of people.
Senate Bill No. 2593, or the New Government Procurement Act (NGPA), has already entered the period of individual amendments which started on May 15, 2024. The NGPA aims to digitalize and streamline the procurement process while paving the way for a greener, more sustainable, transparent, and participatory procurement process. Part of this mission is to establish an electronic Marketplace or e-Marketplace—an online platform where agencies may directly procure supplies and equipment from competent and reputable suppliers.
We will also champion sustainability with green public procurement by encouraging agencies to procure common-use supplies and equipment items with green specifications. And in line with our commitment to promoting transparency and public participation—the basic tenets of open governance that we advocate—we will open our procurement process to the non-government sector by allowing them to participate during procurement proceedings.
Closing
Moving forward, we seek to secure a future-proof and sustainable economy marked by a single-digit poverty rate, manageable debt, more quality jobs, and improved public service delivery.
This means that by 2028, we hope to lift about 14 million Filipinos out of poverty, invest more in our very young and well-educated population, implement 185 infrastructure projects, and cut debt to 55.9 percent.
However, we recognize that we can only achieve this through a whole-of-nation approach, with our partners in the US-ASEAN Business Council and all of you leading corporations in the business community playing a crucial role in this endeavor.
As the Philippines moves towards achieving its Agenda for Prosperity, we hope to likewise see greater economic engagement between our two countries. I hope you will continue to be valuable partners of the Philippines. I am confident that together, we can promote economic expansion and open a wide range of opportunities towards a Bagong Pilipinas that we all aspire for.
Thank you very much.
Wabillahi Tawfiq Wal Hidaya, Wasalamu alaikum wa rahmatullahi wa Barakatuhu.
