State Dining Room, Malacañan Palace
July 2, 2024
President Ferdinand R. Marcos Jr. approved the Department of Budget and Management’s (DBM) National Expenditure Program (NEP) for Fiscal Year (FY) 2025, amounting to PhP6.352 trillion approved budget ceiling, during the 17th Cabinet Meeting at the State Dining Room in Malacañan Palace.
According to DBM Secretary Amenah Pangandaman, the government has recalibrated its fiscal targets, adopting a pragmatic strategy to promote growth-enhancing fiscal consolidation. She added that both revenues and expenditures are projected to rise annually by an average of 10.3% and 21% respectively, from 2024 to 2028. Infrastructure spending will be maintained at 5-6% of gross domestic product (GDP), with a focus on sustainable deficit reduction. The fiscal targets and budget allocations are anticipated to free up resources for infrastructure development and other growth-promoting programs.
The 2024 budget stands at PhP5.768 trillion and despite a 10.1% increase in GDP this year, the DBM received a total budget proposal of PhP9.2 trillion. However, the approved budget ceiling is set at PhP6.3 trillion as approved by the Development Budget Coordination Committee (DBCC), reflecting limited fiscal space and considerations such as program readiness, agencies’ absorption capacity and alignment with expenditure directions.
The Total Expenditure Program is divided into four (4) expense classes: Maintenance and Other Operating Expenses (MOOE) which will account for 38.2% or PhP2,424.1 billion; Personnel Services expenditures at PhP1.787 billion or 28.1%; Capital Expenditures at PhP1,292.6 billion, representing 20.3%; and Financial Expenses targeted at PhP848.1 billion or 13.4%. Additionally, the proposed budget is classified into two (2) types of appropriations: a total of PhP4,247 billion or 66.9% will be appropriated for government programs already authorized under existing laws, and 2.1% of the proposed budget will be allocated under unprogrammed appropriations as standby funds that can only be released when certain conditions are met, which is significantly lower than in previous years.
The top 10 of the proposed FY 2025 Total Expenditure Program are in Education, Public Works, Health (includes Philippine Health Insurance Corporation or PhilHealth), Interior and Local Government, Defense, Social Welfare, Agriculture, Transportation, Judiciary and Justice.
The DBM is set to submit the proposed FY 2025 National Expenditure Program to the House of Representatives on July 29, 2024.
Budget Secretary Pangandaman also reported that the Philippine economy expanded by 5.7% in the first quarter of 2024, resulting in a 6.1% average growth rate since the Administration took office from the third quarter of 2022 to the first quarter of 2024, making the Philippines a frontrunner among the Association of Southeast Asian Nations (ASEAN) countries despite the external headwinds. She added that the Philippine economy is expected to surpass emerging economies at 6% to 7% in 2024, and is expected to expand further to 6.5% to 7.5% by 2025.
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