THE Philippines now has a better chance of attaining a strong post-pandemic economic recovery with Congress adopting the Medium-Term Fiscal Framework (MTFF), according to the Department of Finance (DOF) and the Department of Budget and Management (DBM).
The Senate and the House of Representatives sponsored their respective resolutions backing the 2022-2028 MTFF. The Senate version, which was approved last week, was later adopted by the House as an amendment to its version.
DOF and DBM stressed that the MTFF serves as the government’s blueprint to steer the economy back to its high-growth trajectory. The DBM added that this is the first time a fiscal strategy was approved by Congress.
“The targets set in the Medium-Term Fiscal Framework will guide the legislative agenda of the government. The express support of Congress ensures the alignment of measures that will help the country sustain growth and achieve upper-middle income status,” Finance Secretary Benjamin E. Diokno said.
Under the MTFF, the government targets faster economic growth at 6.5 to 7.5 percent of gross domestic product (GDP) in 2022 and 6.5 to 8.0 percent of GDP annually from 2023 to 2028.
It envisions the Philippines as an upper-middle income economy, with a poverty rate reduced to 9 percent by 2028.
MTFF strategies are aimed at reducing both the National Government (NG) debt-to-GDP ratio to less than 60 percent by 2025; and the NG deficit-to-GDP ratio to 3 percent by 2028.
DBM added that Senate Concurrent Resolution No. 3 specifically states that the legislative agenda will be guided by the MTFF.
The resolution supports both the near-term and medium-term socioeconomic agenda that addresses issues in areas of food security, transport and logistics, energy, fiscal management, health, education, social protection, and bureaucratic efficiency.
DBM noted, however, that the Senate version also called for a review and update of the MTFF after three years or in 2025.
“We would also like to thank Congress for recognizing the importance of a fiscal consolidation and resource mobilization plan, including measures such as rightsizing government structures and personnel,” Budget Secretary Amenah Pangandaman said.
The Senate resolution was sponsored by Finance Committee Chairman Sonny Angara, who pointed out that it was the first time since he led the Committee on Finance and throughout his nearly 20 years of being a legislator that a fiscal framework was laid down as a guide towards the nation’s economic development.
In the House, the resolution was sponsored by Marikina Rep. Stella Luz A. Quimbo, vice-chair of the Appropriations committee, who said, “It is important that Congressional initiatives are aligned with the economic recovery programs of the National Government.”
Pangandaman also chairs the Development Budget Coordination Committee (DBCC), which is composed of the DBM, the Department of Finance (DOF), the National Economic and Development Authority (NEDA) and the Office of the President (OP), with the Bangko Sentral ng Pilipinas (BSP) as a resource agency.