This Public Expenditure Review analyzes trends in revenues, expenditures and development outcomes over the past 10 years. Its main findings are that, since the late 1990s, the Philippines has been caught in a low-revenue, low-expenditure trap and that the current level of public revenues is not sufficient to close the development gap between the Philippines and East Asian comparator countries. The Philippines exhibits similar efficiency of public expenditures as the regional averages in public education and public health spending, but low efficiency in transport. The distribution of revenues, expenditures and some key development outcomes across regions in the Philippines is becoming more unequal. Besides not generating enough revenues to satisfy its development needs, the Philippines tax system extracts very little revenue from the top income quintile and is highly inequitable across sectors and employment categories. The PER urges the adoption of tax policy measures to increase the overall revenue envelope as well as expenditures on education, health conditional cash transfers and, eventually, infrastructure. It also recommends reforming the public investment management system as well as the formula used for distributing intergovernmental fiscal transfers to include equity considerations.