MANILA – Economic managers have lowered the government’s growth target for 2022 after taking into consideration the impact of the latest external developments.
In a briefing on Friday, Department of Budget and Management (DBM) Secretary Amenah Pangandaman said the latest gross domestic product assumption for the year was changed to between 6.5 percent and 7.5 percent, lower than the 7 percent to 8 percent approved by economic managers in May, “in consideration of recent external and domestic developments.”
However, the 2023-2025 forecasts were hiked to 6.5 percent to 8 percent from the previous 6 percent to 7 percent.
The 2026-2028 growth assumption is between 6.5 percent and 8 percent.
“The increase in household consumption and private investments, along with a robust manufacturing industry, high vaccination rate, improved health care capacity, and the upward trend on tourism and employment has allowed us to safely re-open the economy and register a positive growth for the first three months of 2022,” according to a statement.
Relatively, the inflation assumption for the year was changed to between 4.5 percent and 5.5 percent from 3.7 percent to 4.7 percent.
The 2023 figures were also adjusted to 2.5 percent to 4.5 percent from 2 percent to 4 percent but the 2024-2025 figure was retained at 2 percent to 4 percent and was even approved as the range until 2028.
The changes were made as the rate of price increases is seen to accelerate further in the coming months due in part to the volatility in global oil prices.
The inflation rate in the first half of the year averaged 4.4 percent, higher than the 2 percent to 4 percent target band of the government.
Monetary authorities projected inflation to average at 5 percent this year.
The peso-US dollar assumption for the year was kept at PHP51 to PHP55 but the 2023 figure was changed from PHP50 to PHP53 to PHP51 to PHP55, which is also the assumption until 2028.
The growth assumption for exports was kept at 7 percent for this year and 6 percent until 2025, which was also adopted as the assumption until 2028.
Imports growth assumption for this year was hiked to 18 percent from 15 percent previously.
The 2023 assumption of a 6 percent expansion and 8 percent growth for 2024-2025 was also kept and was adopted as the assumption until 2028.
In terms of fiscal numbers, the revenue assumption of PHP3.304 trillion for this year was kept, along with the PHP3.632 trillion for 2023 and PHP4.062 trillion for 2024.
However, the 2025 assumption of PHP4.548 trillion was hiked to PHP4.576 trillion.
By 2026, revenues are seen to hit PHP5.155 trillion while an increase to PHP5.821 trillion and PHP6.589 trillion are seen in the succeeding two years.
The budget gap for this year was kept at PHP1.65 trillion and the 2023 assumption at PHP1.453 trillion.
“This will be achieved through improved spending efficiency and alignment of budget priorities that are anchored on the administration’s two eight-point socio-economic agendas, one for the near-term and another for the medium-term,” the statement read.
During the same briefing, Socioeconomic Planning Secretary Arsenio Balisacan said the possible economic recession in the United States and the slowdown in China would benefit the Philippine economy “because that lowers demand for oil.”
Meanwhile, the DBM will endorse to Congress a rightsizing bill that aims to reform the government manpower by removing redundant positions and producing a more efficient bureaucracy.
Pangandaman said the Duterte administration included the same measure among its priorities “but it was fairly unpopular.”
“But with the instructions of the President (Ferdinand Marcos Jr.) to the Cabinet members to also look at your existing structures, I think it’s wise to re-file the bill,” she added.
Former socioeconomic planning secretary Ernesto Pernia previously said the measure was not meant to lay off workers but to transfer them to another division or department to make operations of the unit better and address redundancy.
Under the proposal, workers who will be affected by the program will not be forced to retire or resign but will be given an option to avail of retirement benefits or separation incentives or will be included in the talent pool to be assigned to agencies needing personnel augmentation. (PNA)