THE Philippine economic team has maintained its growth targets for 2023 at 6.0 percent to 7.0 percent while revising macroeconomic assumptions to reflect higher inflation and easing global oil price trends, the Department of Budget and Management (DBM) secretary said on Monday.
“The average inflation rate assumption for 2023 is increased to 5.0 percent to 7.0 percent from the previous assumption of 2.5 percent to 4.5 percent given the persisting high prices of food, energy and transport costs,” Secretary Amenah Pangandaman, who chairs the Development Budget Coordination Committee (DBCC), said.
“We maintained our growth targets at 6.0 percent to 7.0 percent for 2023 and 6.5 percent to 8.0 percent for 2024 to 2028 in consideration of the risks posed by geopolitical and trade tensions, possible global economic slowdown, as well as weather disturbances in the country,”
Pangandaman said.
The Philippine economy grew by 7.6 percent in 2022, outperforming the DBCC’s growth target of 6.5 percent to 7.5 percent.
“This high-growth performance is projected to continue until 2028, aligned with the Medium-Term Fiscal Framework,” Pangandaman said as the 184th DBCC Joint Statement was issued.
Moreover, in line with the Philippine Development Plan (PDP) 2023-2028, the government will focus on modernizing agriculture, expanding agri-business, encouraging private sector participation in infrastructure development, promoting digital transformation, and enhancing the competitiveness of local industries, according to her.
By implementing the reforms and strategies already outlined in the PDP 2023-2028, Filipinos can expect a more robust Philippine economy with a single-digit poverty level.
Assumptions revised
Meanwhile, the committee also approved the revisions to the macroeconomic assumptions based on emerging data.
“The average inflation rate assumption for 2023 is increased to 5.0 percent to 7.0 percent from the previous assumption of 2.5 percent to 4.5 percent given the persisting high prices of food, energy and transport costs,” Pangandaman said.
The government, through the Inter-Agency Committee on Inflation and Market Outlook (IAC-IMO) is committed to pursuing an all-of-government approach to continuously implement immediate and medium-term strategies to alleviate inflation, ensure food and energy security, and 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 is lowered to $70 to $90 per barrel considering the global demand slowdown.
The secretary also said 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 as the latest forecasts suggest falling global crude oil prices over the medium term.
Pangandaman also said that the peso-dollar exchange rate assumptions for 2023 were adjusted downwards to $53 to $57, and are expected to be maintained at the same level until 2028.
This positive outturn is attributed to the central bank’s policy normalization measures, as well as expected inflows from improvements in tourism revenues and OFW (overseas Filipino workers) remittances because of the reopening of the country’s economy, she said.
“Goods exports and imports growth projections for this year remain 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 and 8.0 percent, respectively, in the medium term,” the secretary added.
“The DBCC is committed to taking proactive measures to bring inflation back within the target range while developing physical, social and digital infrastructures to gear up the Philippines for more investments and opportunities that every Filipino can enjoy,” Pangandaman said.