DBCC hikes 2023 inflation projection to 5-7%
INQUIRER PHOTO / GRIG C. MONTEGRANDE
MANILA -The pace of growth in the prices of goods and services that households commonly purchase remains a key concern, such that state economic managers now assume inflation to average higher this year than they did four months ago.
The Development Budget Coordination Committee (DBCC) now expects full-year 2023 inflation to settle within the range of 5 to 7 percent, instead of the 2.5 to 4.5 percent that they forecast in December 2022.
With a midpoint of 6 percent, the updated range suggests that the 2023 average will be more likely than not to be higher than the 5.8 percent average recorded in 2022.
The more pessimistic inflation outlook might influence expectations of additional interest rate hikes even if monetary policymakers have hinted over the past few weeks that a pause on increases may be forthcoming as early as this quarter.
Slowdown
Earlier this month, the Philippine Statistics Authority said inflation averaged at 8.3 percent in the first quarter.
The monthly print eased for the second month in a row from 8.7 percent in January through 8.6 percent in February to 7.6 percent in March.
Back then, considering the readout, Secretary Arsenio Balisacan of the National Economic and Development Authority said that while inflation was beginning to slow down, it remained the most pressing issue that the government must monitor and urgently address.
On Monday, Budget Secretary Amenah Pangandaman said in a media briefing the latest DBCC assumptions also pointed to yearly average inflation receding back to the target range of 2 to 4 percent starting next year until 2028.
Target range
“Nevertheless, the government, through the Inter-Agency Committee on Inflation and Market Outlook is committed to pursuing an all-of-government approach to continuously implement immediate and medium-term strategies to alleviate inflation, ensure food and energy security, and return to the target range [throughout the next five years],” Pangandaman said.
Meanwhile, the DBCC raised their projections on both the national government’s revenues and disbursements, expecting the benefits of the implementation of the Marcos administration’s medium-term fiscal framework to kick in.
The committee now expects revenues to improve yearly from P3.73 trillion in 2023 to P6.62 trillion in 2028.
Last December, revenues were projected to reach P3.7 trillion in 2023 and P6.58 trillion in 2028.
The assumption is that seven tax reform measures would have been implemented starting in the next two years, although Finance Secretary Benjamin Diokno noted that all of these are still pending in Congress.
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