Philippines fiscal gap on track to ease to 4% of GDP by 2028

Philippines fiscal gap on track to ease to 4% of GDP by 2028

MANILA, Philippines – The Marcos administration's fiscal consolidation efforts are showing signs of progress, with the budget deficit expected to ease to 4% of GDP by 2028. This significant reduction is part of the government's broader strategy to stabilize the economy and promote growth.

In the first half of 2025, the government exceeded its budget deficit limit, logging a gap of P765.5 billion, which was 24.69% higher than the previous year [1]. However, the latest data from the Bureau of the Treasury (BTr) indicates a narrowing of the fiscal gap, with revenues growing by 5.15% to P2.26 trillion and expenditures increasing by 9.49% to P3.03 trillion.

President Ferdinand Marcos Jr. is expected to unveil plans to boost growth in his annual speech to Congress on July 2, 2025. The speech will focus on welfare and infrastructure programs, addressing economic and political risks [2]. The president's efforts to end hunger by 2027 through the "Walang Gutom 2027" program, which aims to provide food grants to 750,000 families, are also expected to be highlighted. Additionally, the speech will likely discuss infrastructure development, a key area for growth, and the government's strategy to balance relationships with the U.S. and China.

The fiscal consolidation program, coupled with the president's growth plans, is expected to help the Philippines achieve its goal of reducing the fiscal gap to 4% of GDP by 2028. This will require continued efforts in revenue generation and expenditure management, as well as the successful implementation of infrastructure and welfare programs.

References:

[1] https://business.inquirer.net/537354/marcos-admin-breached-budget-deficit-ceiling-in-h1
[2] https://www.ainvest.com/news/marcos-unveil-growth-plans-philippines-faces-risks-2028-elections-2507/