IN THEIR first few days in office, President Rodrigo R. Duterte’s economic team will review the targets left behind by the Aquino administration, with the Cabinet-level, interagency Development Budget Coordination Committee (DBCC) scheduled to meet next week.
Budget Secretary Benjamin E. Diokno told the Inquirer on Thursday that the DBCC meeting would be held on Tuesday, July 5, during which “all economic numbers will be revisited.”
Aquino’s economic managers earlier scheduled to convene their last DBCC meeting last June 28, but it was suddenly cancelled.
The Aquino administration earlier set economic growth targets until 2019, as follows: 6.8-7.8 percent in 2016; 6.6-7.6 percent in 2017; 7-8 percent in 2018; and 6.9-7.9 percent in 2019.
These projections were slightly cut from the previous target range of 7-8 percent in the medium term as the DBCC last February took into consideration external risks coming from a then slower Chinese economy as well as cheaper global oil prices.
Diokno had also said the budget deficit would be widened to 3 percent from the annual Aquino administration deficit target of 2 percent in line with plans to ramp up government spending, especially on infrastructure.
Such would result into a possible upward adjustment in the borrowing program for the next six years.
Expenditures were programmed by the Aquino government to amount to P2.993 trillion in 2016 and further increase to P3.372 trillion in 2017 and P3.76 trillion in 2018.
By 2019, government spending should surpass the P4-trillion level to P4.196 trillion.
For Duterte’s economic managers, a still fragile global economy coupled with the consequences of the “Brexit” vote would be among the external developments to consider.
On the domestic front, fiscal targets may have to reviewed in line with the Duterte administration’s plan to pursue comprehensive tax reform, as part of which is the reduction in individual and income tax rates.
Under the prevailing program, revenues were expected to reach P2.697 trillion this year, and exceed the P3-trillion mark next year to hit P3.04 trillion.
Revenue collections were projected to rise to P3.392 trillion in 2018 and P3.787 trillion in 2019.
Diokno had said economic growth this year may settle at about 6.2 percent, with second-quarter GDP expansion expected to be faster than the first quarter’s better-than-expected 6.9 percent, after which the last two quarters would slow.
For his part, Socioeconomic Planning Secretary Ernesto M. Pernia had said that the growth target range of 6.8-7.8 percent for 2016 was “not impossible,” but the Duterte administration should be “conservative.”
“Since it’s the start of the new administration, we will have adjustment pains. It will not be smooth-sailing right away. There may be some adjustment hiccups,” according to Pernia, who is also the Director-General of the National Economic and Development Authority (Neda).
The Neda chief had said a 6.5 percent gross domestic product (GDP) growth by yearend would be “feasible.”
Also, Diokno said the first order of business at the Department of Budget and Management (DBM) under his watch would be “a review of what remains out of the 2016 budget and the preparation of the 2017 budget.”
Diokno earlier said the Duterte administration would buy some more time to review the proposed 2017 national budget, but maintained that there would be no reenacted budget in the next six years.
“We have enough time to review the budget to make sure that the 2017 budget is President Duterte’s budget,” Diokno had said, as the Aquino administration early this year started to formulate the proposed P3.5-trillion nation budget for next year.
Meanwhile, key economic agencies will be holding simultaneous turnover ceremonies today.
Outgoing Finance chief Cesar V. Purisima will officially turn over the Department of Finance to Secretary Carlos G. Dominguez III at the Bureau of the Treasury’s historical Ayuntamiento building in Intramuros, Manila.
Diokno said turnover ceremonies at the DBM would be held this morning; while over at Neda, outgoing chief Emmanuel F. Esguerra will be turning over the leadership at the state planning agency to Pernia.