DBCC to reassess economic growth, inflation targets
At A Glance
- The Marcos administration's macroeconomic targets will undergo a review by the Development Budget Coordination Committee (DBCC) on Oct. 19.<br>The DBCC will reassess GDP and inflation assumptions during the review. The growth target for this year is set at 6 percent to 7 percent.<br>The country's growth rate in the first half of the year was 5.35 percent. To meet the target, GDP needs to grow by at least 6.6 percent in the second half.<br>The ADB revised its GDP growth forecast for the Philippines to 5.7 percent for this year. The World Bank and International Monetary Fund have yet to officially revise their growth forecasts.<br>Finance Secretary Benjamin Diokno said the Philippines remains the fastest-growing economy in this region, ahead of China and Vietnam.<br>The DBCC has a target inflation range of 2.0 percent to 4.0 percent for this year.<br>The central bank forecasts an average inflation rate of 5.4 percent for this year and 2.9 percent for next year.<br>The average rate of consumer price increase from January to August was 6.6 percent.
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The Development Budget Coordination Committee (DBCC) will review the macroeconomic targets of the Marcos administration later this month, taking into account the challenging global economic conditions.
Finance Secretary Benjamin E. Diokno said the DBCC, which is responsible for setting the government's macroeconomic assumptions, will convene on Oct. 19 to re-evaluate its projections for gross domestic product (GDP) and inflation.
“We will review the growth targets, where we are on inflation, and then of course we will review the underspending,” Diokno told reporter during the recent Chat with SBED last Friday, Sept. 29. “Also, we will review [global] propspects.”
The economic team had initially set a growth target of six percent to seven percent for this year. For 2024 to 2028, the economy is projected to register growth ranging from 6.5 percent to 8.0 percent.
As of the first half of the year, the country's growth rate stood at 5.35 percent. In order to meet the full-year target, the GDP would need to grow by a minimum of 6.6 percent in the second half.
"We will review the performance of the first semester, and if necessary, we will modify the target," the finance chief said.
Diokno also said the growth assumptions for the Philippines have been revised by the World Bank, the International Monetary Fund (IMF), and the Asian Development Bank (ADB).
On Sept. 20, the ADB lowered its GDP growth forecast for the Philippines to 5.7 percent for this year, down from the six percent projection announced in April.
If this projection materializes, it would fall below the government's target for the year and indicate slower growth compared to the 7.6 percent GDP expansion recorded in 2022.
As for the World Bank and IMF, they have yet to officially revise their growth forecasts, which currently stand at six percent and 6.2 percent, respectively.
"I think the general sentiment, based on the World Bank, globally, there have been downgrades. The good news is that the Philippines will continue to be the fastest-growing economy in this region. We are ahead of China and Vietnam," said Diokno.
"While there is a tendency for downgrades, we still maintain our position as the fastest-growing economy," he added.
Meanwhile, the DBCC has set an inflation target range of 2.0 percent to 4.0 percent for this year.
However, the Bangko Sentral ng Pilipinas is already forecasting an average inflation rate of 5.4 percent for this year, and 2.9 percent for the following year.
The average rate of consumer price increase stood at 6.6 percent from January to August.