Gov’t to propose P5.08-T budget in 2023

Published May 25, 2022, 2:37 PM

by Chino S. Leyco

Presumptive President Ferdinand R. Marcos Jr. would get P5.086 trillion national budget for 2023, almost a reenactment of the 2022 national budget of P5.024 trillion.

The inter-agency Development Budget Coordination Committee (DBCC) approved on Tuesday, May 24, the proposed appropriations next year, which is equivalent to 21.3 percent of the country’s gross domestic product (GDP). The proposed 2023 budget is only 1.2 percent higher than this year’s P5.024 trillion national budget.

Budget Officer-in-Charge Secretary Tina Rose Marie Canda said the marginal increase is the “prudent fiscal” level, noting that “it may be tight, but we have to live within that level if we want to be respected by the international financial community.”

The DBCC also approved the government’s proposed budget for 2024 at P5.392 trillion, or 20.8 percent of GDP.

The Department of Budget and Management is expected to transmit to Congress its proposed 2023 spending appropriations within a month from the President’s state of the nation address in July.

Meanwhile, the DBCC expects revenues hit P3.633 trillion next year.

Moreover, Marcos Jr. will also inherit a narrower economic growth target from outgoing President Duterte owing to unfavorable external environment.

The DBCC, an inter-agency body that sets the country’s macroeconomic targets, slightly revised its GDP target range for this year to between 7.0 percent and 8.0 percent. This is narrower than its earlier assumption of 7.0 percent to 9.0 percent.

Socioeconomic Planning Secretary Karl Kendrick T. Chua said the revision was primary driven by external risks, such as the Russian-Ukraine war, China’s slowdown, and monetary normalization in the United States.

Meanwhile, real GDP growth was retained at 6.0 percent to 7.0 percent for 2023 to 2025 as the economy is expected to sustain its strong recovery in the medium term, the economic team said.

“Shifting the entire country to alert level 1, increasing the vaccination rate, especially for seniors and children, and reopening all face-to-face classes are crucial to further strengthen domestic demand, cushion the impact of external events, and achieve our growth targets,” it said.

Moreover, the average inflation rate assumption for this year was also adjusted upwards and is projected to range from 3.7 percent to 4.7 percent. This is higher than the government’s target of 2.0 percent to 4.0 percent.

The adjustment was due to following the uptick in the price of food and energy as a result of ongoing geopolitical tensions from the Russia-Ukraine conflict and disrupted supply chains.

Nevertheless, the DBCC maintained the inflation rate assumption at 2.0 percent to 4.0 percent for 2023 to 2025, consistent with the latest forecast of other agencies and its deceleration over the medium-term.