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Thursday, April 18, 2024

Diokno: PHL GDP to grow over 7.5%, but will slow down by 2023

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FINANCE Secretary Benjamin E. Diokno said the country’s economy as measured by the gross domestic product will grow by more than 7.5 percent this year as all sectors were surging led by the manufacturing and construction sectors.

“All things considered, the Philippines did very well in 2022—both politically and economically. The 2022 presidential and local elections were peaceful and the transfer of power was frictionless. Both feats should be the envy of most democratic governments,” Diokno said.

“The Philippine GDP will likely grow much faster than the official target range of 6.5 to 7.5 percent this year,” Diokno said.

Inflation, which has been a challenge for almost all countries  both developed and emerging, has been a major concern for Philippine authorities, too.  But for the Philippines, Diokno said the outlook is that inflation will start to ease next year and will be within the target band of 2  to 4 percent by 2024.

“This positive prediction is based on the very close coordination between monetary and fiscal authorities and the falling prices of oil and related commodities,” he said.

Oil prices, a major source of imported inflation, have gone back almost to levels before the Russia-Ukraine conflict amid worries over global demand outlook, Diokno said.

The oil futures market remained in what he called “backwardization” status as of November 29, owing to weak demand due to production disruptions in China, tighter global financial conditions and deteriorating world growth prospects.  

For next year, however, the country’s GDP outlook will only grow less than 6 percent as many institutions and experts have predicted a global recession in 2023.

The interagency Development Budget Coordination Committee (DBCC) said the Philippine economy will grow by 6 to 7 percent next year in the face of external headwinds.

“But an average GDP growth of 6.5 percent is nothing to be sneezed at: it is still one of the highest, if not the highest, growth rates among ASEAN+6 economies,” Diokno said.

Diokno said there were many reasons for this optimistic view, the first of which was the early approval of the 2023 national budget.

“This means that the programs and projects of the national government will start to run from day one of the new year. This is especially relevant for public construction which is about one-fifth of the P5.2 trillion national budget,” he said.

There is also the early adoption of the first-ever Medium-Term Fiscal Framework or  MTFF 2023-2028, which President R. Marcos Jr. unveiled in his State of the Nation Address.  He cited as well the swift approval of the Philippine Development Plan 2023-2028. The PDP is a coherent plan for economic and social Transformation that accelerates economic and social recovery towards inclusive and resilient prosperity.

“As long as the country stays united and its political leaders and policy makers remain focused on economic growth, the Philippines’ future remains bright. The trajectory of its growth will make the country one of the leading economies in the Asia-Pacific region,” Diokno said.

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