Fiscal indicators under the Duterte administration generally tended upward, though the pattern was shaped by the pandemic shock during the middle of the term. Pre-pandemic in the early years, revenues grew steadily, supported by improved tax administration and the initial impact of the TRAIN reforms. Revenue effort rose from around 14.9 % of GDP in 2017 to about 16.1 % in 2019, thus consistent with the administration’s strategy of strengthening the fiscal base. On the expenditure side, spending increased more rapidly as it rose from about 17.1 % of GDP in 2017 to 19.5 % in 2019, while infrastructure disbursements climbed steadily under the “Build, Build, Build” program. This addressed the underspending patterns observed in earlier administrations when infrastructures barely got 3% of GDP.

            For obvious reasons, the fiscal trajectory shifted sharply during the pandemic. Revenues weakened in 2020 as economic activity contracted, while expenditures rose significantly to fund health-related measures, social protection, and stimulus programs. The deficit widened to -7.6 % of GDP in 2020 and remained elevated at -8.6 % in 2021, while the debt to GDP ratio rose from 39.6 % in 2019 to 60.9 % in 2022. It has been very difficult for the BBM Administration to bring that ratio down to the original 30’s. To the credit of the Duterte Administration, despite the pandemic-related crisis, infrastructure spending was largely sustained at close to 6% of GDP in 2022, matching the average in the ASEAN region.

            Spending composition remained anchored on social and economic services, generally continuing the sectoral priorities of the Aquino Administration but at a larger fiscal scale. Social services consistently accounted for the largest share of expenditures, rising from 36 to 37 % in the early years to a peak of 40.7 % in 2020 during the pandemic, before easing to 36.4 % by 2022. Economic services generally hovered around one-third of the total spending, dipping to 26.2 % in 2020 and recovering to 32.6 % by the end if the term. Meanwhile, the shares of general public services and defense remained relatively stable throughout the period. Net lending, while small in overall share, exhibited the greatest volatility. Its share spiked in 2020 because of pandemic-related interventions and returned to minimal levels thereafter. This was reflected in the borrowing rates, which surged during the crisis—particularly net lending—and normalized by 2022.

            It can be concluded that the fiscal management team under the Duterte Administration did a very commendable job in crisis management. Working in tandem with the monetary authorities, they minimized the economic harm inflicted on the country by the pandemic. By 2021, revenues again exceeded program targets while expenditures remained below target, resulting in a narrower but still positive deficit variance. By the end of the presidential term in 2022, both revenues and expenditures were above programmed levels as the economy normalized, and the fiscal balance showed a small positive variance.

            Then in July 2022 entered the BBM Administration which assumed office amid a fragile post-pandemic recovery marked by elevated inflation, limited fiscal space, and heightened global uncertainty. Although growth had rebounded to an impressive 7.7 % in 2022, inflation reached a high of 5.6 %--above the 2 to 4 % band considered normal. Unemployment remained slightly above the plan’s target range. These conditions shaped both the PDP 2023-2028 and the Medium-Term Fiscal Framework (“MTFF”) which together defined the BBM Administration’s macro-fiscal direction.   

            Under this framework, real GDP growth was targeted at a high of 6.5 to 8.0 %, inflation within the 2 to 4 % band, and unemployment on a gradual downward path. On the fiscal side, the MTFF adopted a consolidation-with-growth approach. Revenue effort was programmed to rise from about 15.3 % to 17.6 % of GDP, while expenditure effort was set to ease. The fiscal deficit was programmed to decline from around 6.5 % of GDP in 2022 to about 3.0 % by the end of the plan period, alongside a reduction in the debt-to-GDP ratio from 63.7 % to about 51.1 %. It may take time before this ratio can be brought back to the 30 % or level that prevailed before the pandemic. It must be stated, though, that debt-to-GDP ratios of 100 % or more are very common among countries like Japan and the U.S.

            Unlike the two previous Administrations, which relied primarily on the PDPs and the DBCC’s macro-fiscal programs as executive planning documents, the BBM administration’s fiscal targets were formally endorsed by Congress through Senate Concurrent Resolution No. 3. For this reason, we are using in this article the MTFF targets under Concurrent Resolution No. 3 as the principal macro-fiscal reference for the present Administration. To attain these avowed targets, the BBM Administration adopted a coordinated strategy combining growth restoration with fiscal consolidation. On the macro side, policy focused on reviving investment, containing inflation, rebuilding human capital and improving institutional productivity. Growth was to be supported through the CREATE MORE Law (RA 12066) which drives investment incentives, liberalization reforms, and expanded physical and digital infrastructure. Inflation management centered on food and energy security, lower logistics costs, and prudent monetary policy, while education, health, and reskilling programs were intended to address pandemic scarring.

            On the fiscal side, the MTFF aimed to raise revenues through new tax measures—such as VAT on digital services and selected taxes—alongside continued BIR and BOC modernization. Expenditures were programmed to remain above 20 % of GDP, with infrastructure sustained about 5 to 6 % of GDP and priority funding for health, education, and social protection. Over time, the deficit and debt ratios were to decline through expenditure controls, pension and rightsizing reforms, and expanded private sector participation in infrastructure spending.

Responsible fiscal management was especially evident in addressing the high debt-to-GDP ratio of more than 60 % that resulted from the massive borrowings necessitated by the pandemic. This responsible debt management enabled the economy to broadly track the MTFF path, with the debt-to-GDP ratio at 60.9 % in 2022, 60.1 % in 2023, and 60.7 in 2024. Pressures from higher interest rates, higher inflation, and global uncertainties, however, will keep the debt-to-GDP ratio close to the 60-percent IMF indicative benchmark for emerging and developing economies. It will take some time before we begin to see the level reduced to the thirties that prevailed before the pandemic, especially as in early 2026 we are facing the price of oil in the world market reaching the $140 per barrel level because of the war between U.S.-Israel and Iran. To be continued.