BROADENING the tax base, improving collection efficiency, and making public spending more efficient and equitable will help the Philippines unlock between 3.6 percent and 7.1 percent of gross domestic product (GDP) in combined savings and additional revenue annually, the World Bank (WB) said in a report.
In its Philippines Public Finance Review report released Monday, Sept. 28, 2026, the WB identified three categories of reform actions that the Philippines should implement to attain substantial fiscal gains.
According to the report, executive-led reforms including consolidated procurement, easier tax payments, streamlined corporate tax incentives, and tighter limits on unprogrammed appropriations offer the fastest route to fiscal space.
The international lender said procurement reform alone could save up to P435 billion annually.
It also recommended closing fiscal gaps by implementing legislative and institutional reforms that will strengthen revenue and spending by expanding e-invoicing and audits, rationalizing value added tax (VAT) exemptions, and modernizing fiscal management systems.
According to the report, this could be done without raising statutory tax rates, adding that expanded cash transfers would protect poor and vulnerable households.
The third category is targeting human capital.
According to WB, better-targeted health, education, and social protection spending could improve outcomes without increasing budgets.
It added that a social program registry could lift about two million Filipinos out of poverty, while stronger foundational learning and streamlined medical assistance could improve education and reduce health costs.
“Earlier this year, the Philippines crossed into upper-middle-income status, a testament to decades of hard work and sound policy,” Zafer Mustafaoğlu, division director for the Philippines, Malaysia, and Brunei, said in a statement.
“The 3.6 percent to 7.1 percent of GDP in potential fiscal gains — hundreds of billions of pesos already within the system’s reach — can fuel the next chapter of that journey: more children learning to read, more families shielded from the financial devastation of illness, and millions of Filipinos lifted from poverty. The World Bank is proud to be a steadfast partner to the Philippines in building the fiscal system that a rising nation deserves,” Mustafaoğlu added.
The WB’s report examines the Philippine fiscal system through a broader development lens.
It analyzes how revenues are raised, how public resources are allocated and spent, and how fiscal institutions influence outcomes across government.
In his speech at the public launch of the report on Monday, Finance Secretary Frederick Go, meanwhile, said the government will continue strengthening the foundations of the Philippine economy.
“Our debt and deficits, while manageable, remain above where they were before the pandemic. The fiscal space that once gave us room to maneuver — the buffer that lets us act decisively in a crisis — has yet to fully recover. In a world where the next shock is not a question of if, but when– that matters enormously,” Go said.
Go cited the need to rebuild the country’s fiscal buffers and consolidate fiscal and economic resilience.
“We need to ensure that we have the capacity to protect our people, sustain our investments, and emerge stronger,” he said.
Go said the Public Finance Review “offers us a clear-eyed view of one of our most significant opportunities on the revenue side.”
“Our tax rates are broadly in line with our regional peers. What remains is to unlock the full potential of a system that, with the right reforms, can do more for the Filipino people,” Go said.
“This means that the path forward is not to raise statutory rates, but to broaden the base. This includes disciplining the use of exemptions that have accumulated over decades. We should only retain tax subsidies that provide support for vulnerable households, bring in investment, create good jobs, and improve productivity.” / PNA
