President Marcos’ economic managers are confident that the country is still on track to meet its growth target for the year despite higher than expected inflation and global headwinds.

The inter-agency Development Budget Coordination Committee (DBCC) on Monday, April 24, kept its gross domestic product (GDP) target of 6.0 percent to 7.0 percent for this year and 6.5 percent to 8.0 percent for 2024 to 2028.

Budget Secretary Amenah F. Pangandaman said the GDP forecast already factored in risks posed by geopolitical and trade tensions, possible global economic slowdown, as well as weather disturbances in the country.

The DBCC, however, adjusted upwards its inflation outlook for 2023 on the back of “persisting high prices of food, energy, and transport costs.”

According to the inter-agency body tasked to set the government’s macroeconomic assumptions, inflation may average around 5.0 percent to 7.0 percent, higher than the previous assumption of 2.5 percent to 4.5 percent.

But the DBCC expects inflation to return to the target range of 2.0 percent to 4.0 percent between 2024 and 2028.

Meanwhile, the assumption for the price of Dubai crude oil for 2023 has been lowered to $70 to $90 per barrel due to global demand slowdown.

The latest forecasts suggest that global crude oil prices will continue to decline in 2024 before stabilizing at $60 to $80 per barrel between 2025 and 2028.

Moreover, the peso-dollar exchange rate assumptions for the year were adjusted downwards to 53 to 57, and are expected to be maintained at the same level until 2028.

Goods exports and imports growth projections for this year remained at 3.0 percent and 4.0 percent, respectively, following the trend in near-term global demand outlook and trade prospects.

These are expected to stabilize at 6.0 percent percent and 8.0 percent, respectively, in the medium term.

Services exports are expected to perform better this year and next year following the recovery of the tourism sector and the continued resilience of the business process outsourcing (BPO) sector.

Specifically, services exports growth was adjusted upwards from 12 percent to 17 percent in 2023 and from six percent to 16 percent in 2024.

Services imports growth estimates were also increased from eight percent to 11 percent in 2023 and from eight percent to 10 percent in 2024.