The Marcos administration is facing challenges in achieving its fiscal consolidation goals for this year, according to Nomura, a Japanese investment bank. Nomura forecasts a deficit-to-Gross Domestic Product (GDP) ratio of 5.9 percent in 2024, slightly lower than the 6.2 percent recorded in 2023.
The government overshot its deficit limit of 6.1 percent of GDP in 2023. Nomura’s projection for 2024 would also exceed the Marcos government’s revised deficit-to-GDP target of 5.6 percent, which capped the fiscal gap at P1.5 trillion.
Nomura highlighted that sustaining hefty spending on infrastructure will make it challenging to meet these targets, as the government prioritizes infrastructure spending under the ‘Build Better More’ program.
Recent data from the Bureau of the Treasury (BTr) showed a budget shortfall of P164.7 billion in February. This deficit reversed the P88-billion surplus recorded in January, bringing the year-to-date deficit to P76.7 billion, up by 26.56 percent.
Total expenditures in February rose by 22.14 percent year-on-year to P388.7 billion, with a significant portion going to productive spending on state projects and programs. On the revenue side, collections increased by 5.73 percent to P224 billion, with the Bureau of Internal Revenue and the Bureau of Customs contributing to the growth.
To bridge the budget deficit, the Marcos administration plans to borrow a total of P2.46 trillion in 2024 from creditors at home and abroad. Finance Secretary Ralph Recto aims to improve the state’s fiscal health through better revenue collection without imposing new taxes.
