Gov’t reviews economic targets
Economic managers will review macroeconomic assumptions for next year and the medium term, even as the country’s chief economist expects the Philippine economy to sustain robust growth in the fourth quarter.
Socioeconomic Planning Secretary Ernesto M. Pernia told reporters Thursday night that he expects at least a 6.9-percent year-on-year expansion in the gross domestic product (GDP) for the October to December period, a figure slightly lower than the third quarter’s better-than-expected 7.1-percent growth.
Pernia, who also heads the state planning agency National Economic and Development Authority, nonetheless earlier said that economic data can surprise and may exceed 7-percent growth in the fourth quarter to possibly hit the upper end of the 6-7 percent target for this year. The economy grew by an average of 7 percent during the first nine months.
The Neda chief had said strong private consumption coupled with increased public investments and recovery in the agriculture sector as well as sustained industry and services growth were expected to bolster economic expansion in the near term.
The government targets GDP growth within a higher range of 6.5-7.5 percent in 2017, before further rising to 7-8 percent in 2018 and beyond.
Pernia said the executive would meet with legislators on Jan. 11 next year to push for specific bills seen supportive of economic growth.
The Neda chief said they would pitch at the upcoming Legislative-Executive Development Advisory Council meeting the following measures: Easing of restrictions on private investments; easing of the bank secrecy law; as well as comprehensive tax reform, among others.
But given external developments such as the slowing global growth, the UK’s so-called Brexit from the European Union, US President-elect Donald Trump’s assumption into office early next year, as well as the US Federal Reserve’s plan to hike its policy rate by three more times in 2017 following last week’s 25-basis point increase, Pernia said interest rate assumptions may have to be fine-tuned.
Separately, Bangko Sentral ng Pilipinas Deputy Governor Diwa C. Guinigundo told reporters last week that the foreign exchange assumption moving forward would be “more conservative” amid peso depreciation.
“The revised forex assumption will be announced by the DBCC on Tuesday,” referring to the Cabinet-level, interagency Development Budget Coordination Committee.
“Given the year-to-date average of the peso against the US dollar, we have to be more conservative than the past assumption on exchange rate,” Guinigundo disclosed. He had said that the peso averaged at the higher end of 47:$1 level as of early December, hence nearing the ceiling of the 45-48:$1 assumption.