Metro Manila (CNN Philippines) — Budget Secretary Florencio "Butch" Abad has urged the new administration to keep its finances in order, as a stable fiscal regime is often overlooked as a key factor in driving economic growth.

Foreign investors are encouraged to put their money in the Philippines when they see the government is responsible with its budget and spends within its means, Abad told CNN Philippines on Tuesday (May 18).

When analysts and credit raters recommend reforms, they always focus on fiscal responsibility and good governance, he added.

The Aquino administration was able to finance its expenditures by collecting taxes aggressively, Abad said. The Bureau of Internal Revenue ran after tax evaders, especially among the professionals and the self-employed. The Bureau of Customs also clamped down on smugglers. The government also raised taxes on sin products.

It also cut costs by tightening procurement rules, managing its liabilities to lengthen maturities and bring down interest rates.

In 2015, the fiscal deficit hit just P121.7 billion or 0.9% of the gross domestic product (GDP). It was half of the P283.7-billion cap the government set for the year, 2% of GDP.

Analysts have criticized the Aquino administration though for being too cautious, causing it to underspend, especially on infrastructure, at some point.

Presumptive President Rodrigo Duterte has promised to make this money move. His eight-point economic agenda outlines plans to ramp up spending for public works, social services and security.

But at the same time, Duterte has also vowed to reform the income tax system, which would effectively lower income taxes for most taxpayers.

Abad cautioned against boosting expenditures while also cutting back on a major source of government revenue at the same time.

"If you have a constant regular revenue stream, you would want to maintain that because that is a guaranteed source of revenue for your expenditure," he said. "If you are going to decrease that revenue stream... then you would need to find other sources of revenues to make up for that loss."

One option for the next administration would be to maintain expenditure levels; another would be to raise taxes. Both are unpopular, Abad said.

The government could also borrow more debt to fund its spending. It won't bite taxpayers now, but all debt has to be paid eventually, he explained.

ING Bank Manila, JP Morgan and Fitch Ratings are just some of the organizations that have emphasized the need for fiscal responsibility to keep the economy going.

The increased revenue take of the government, coupled with restrained spending, allowed the government to attain consecutive credit rating upgrades. Under the Aquino administration, the Philippines was moved up to investment grade — considered by foreign investors as a worthy creditor — for the first time in its history.

An investment grade credit rating allows the Philippine government and local corporations to borrow money from abroad at much lower interest rates. It is also used as a benchmark by investors who are looking for countries to park their capital in.

Power player

Abad, a Liberal Party (LP) stalwart, assured the next administration his party would do what it could to ensure the transition would as smooth as possible.

Despite a hard-fought presidential campaign that saw administration bet Manuel Roxas II come in second in the polls, Abad said the LP was ready to help Duterte.

"We have been able to achieve sustained growth over the past six years and we would certainly like that growth to continue. We are open to working with the next administration to achieve that," Abad said.

He explained that campaigning was divisive, as candidates sought to secure votes against their rivals. But governing is about working together to ensure the country progressed with each new administration.

The LP may no longer be the ruling party but Abad said it would still be a key power broker under Duterte's term.

In the new government, he counted six senators, 115 representatives and more than 40 governors affiliated with LP.

"We are a significant player still," he said.

As for Abad, who closes his term as Budget chief in a month, he said he planned to take a long break after a testing six years.

That being said, he emphasized that public service would always be in his blood.