New admin sees further reduced GDP growth in 2022

Published July 6, 2022, 4:11 PM

by Chino S. Leyco

President Marcos’ chief economic manager expects the country’s economy would grow this year at a much slower pace than the inter-agency Development Budget Coordination Committee’s (DBCC) target.

In a briefing on Wednesday, July 6, Finance Secretary Benjamin E. Diokno said the economy, as measured by the gross domestic product (GDP), is expected to increase by 6.5 percent to 7.5 percent this year.

Diokno’s latest projection, however, is slower than the DBCC’s goal of between 7.0 percent and 8.0 percent. The DBCC is an inter-agency body that sets the country’s macroeconomic targets.

But Diokno also noted that the 6.5 percent to 7.5 percent growth was still a “conservative” target after the economy managed to accelerate by 8.3 percent in the first three-months of the year.

“Remember, the first quarter is 8.3 percent, in the second quarter I would think it will be even higher than the 8.3 percent. Why? Because remember we had a Covid surge in January 2022, so that 8.3 percent was only for two-months,” Diokno said.

Moreover, the finance chief expects the GDP will expand by 6.5 percent to 8.0 percent beginning next year until 2028. This growth rate is faster than the government’s target range of 6.0 percent to 7.0 percent for 2023 to 2025.

According to Diokno, these economic growth targets are under the newly approved medium-term fiscal framework, which takes control of government expenditures, borrowing and revenue programs, as well as policies to manage budget deficits in the next six-years.

“This will be the highest growth rate among all ASEAN Plus Three countries this year and next year. That’s the consensus,” he said referring plus three as Japan, South Korea and China.

The finance chief’s GDP assumptions come two days ahead the DBCC meeting on Friday.

Socioeconomic Planning Secretary Arsenio Balisacan earlier said the DBCC would meet to review the recent performance and targets.

But as early as now, Balisacan said that the 7.0 percent to 8.0 percent GDP target set by the DBCC “might be a challenge.”

“I would expect that given the unexpected surges in some of the prices and prolonged disruptions initially triggered by this Ukraine war, seven to eight percent might be a challenge,” Balisacan said.