Philippines cuts 2023 GDP growth target to 6.0-7.0%

MANILA   – The Philippines lowered its growth target for 2023 to 6 percent-7 percent, from 6.5 percent-8 percent, a government inter-agency panel said on Monday, factoring in the impact of a weak peso and high inflation.

The government also revised its foreign exchange rate assumptions for 2022-2024. It now expects the peso to trade against the U.S. dollar at 54-55 in 2022 compared with the previous assumption of 51-53, at 55-59 in 2023, and at 53-57 in 2024, compared with the previous forecast of 51-55 for 2023 onwards.

The growth target for 2024-2028 was maintained at 6.5 percent-8 percent, the Development Budget Coordination Committee (DBCC) told a media briefing.

The peso has recovered slightly against the dollar after declining to a record low of 59 in recent weeks, thanks to a series of interest rate hikes by the Bangko Sentral ng Pilpinas (BSP) to match U.S. Federal Reserve’s aggressive tightening.

It was trading at 55.73-55.88 on Monday.

Officials said the economy was on track to meet this year’s growth goal of 6.5 percent-7.5 percent, which is faster than the 5.6 percent expansion in 2021, after the government removed nearly all COVID-19 restrictions and allowed more business activities to resume.