Analysts at Australia and New Zealand (ANZ) Banking Group note that “Philippines’ revenue and expenditure both outperformed in the first five months of 2022.”

Additional takeaways

“We maintain our budget deficit forecast at 7.7% of GDP. A fiscal slippage of 0.1-0.2% of GDP may materialise if the revenue gains do not offset the supplementary spending requirements.”

“The ratio of revenue to GDP continues to deviate widely from its pre-pandemic trajectory. We underscore the significance of tax reforms if the government eyes to close that gap faster.”

“The new administration’s FY2023 budget will be capped at 22.2% of GDP, fairly in line with the 22.1% spending ceiling adopted by the Duterte administration. The path to fiscal consolidation is gradual, with the government trying to strike a balance.”