Despite El Niño threat, DBCC keeps ʼ23 target

MANILA  -The interagency Development Budget Coordination Committee (DBCC) maintained their assumptions on Philippine economic growth this year despite the threat of El Niño and other natural disasters on agricultural output and prices of goods.

The outlook for 2023 was kept at a range of 6 percent to 7 percent, and for 2024-2028 at 6.5 percent to 8 percent.

Budget Secretary Amenah Pangandaman said in a press briefing the projections were unchanged because of positive developments in the domestic economy and recent global trends.

In the first quarter of the year, the Philippine economy was one of the best-performing economies in the Asia-Pacific region.

Philippine gross domestic product (GDP) grew by 6.4 percent, outpacing other developing and emerging economies, such as Indonesia, China and Vietnam.

Philippines’ GDP growth above-target at 6.4% in Q1 2023

Key factors

“These [growth] projections have already taken into account the risks posed by El Niño and other natural disasters, global trade tensions and value chain disruptions, among other factors,” Pangandaman said.

Growth forecast hiked as inflation risk lingers

She added that the DBCC was confident that the country can withstand these risks and achieve upper-middle-income status in the next two years.

This confidence banks on the implementation of near- and medium-term strategies, such as ensuring timely and adequate importation, providing preemptive measures to address El Niño, strengthening biosecurity, enhancing agricultural productivity, and pushing for legislative reforms such as the Livestock, Poultry, and Dairy Competitiveness and Development Act.

Meanwhile, the committee narrowed their forecast on the average inflation for 2023 to a range of 5 percent to 6 percent —from 5 to 7 percent—partly due to a consistent slowdown in inflation in the first four months of this year.

The Marcos administration’s economic team expects that the inflation rate will return to the target range of 2 to 4 percent as early as 2024.

Gov’t revenues

Gov’t revenues seen to miss targets in ’23 on weak growth

Further, Pangandaman said the DBCC expects national government revenues to reach P3.7 trillion by the end of the year and further rise to P6.6 trillion in 2028, through the implementation of revenue-generating measures over the medium term.

On the other hand, disbursements are expected to remain above 20 percent of GDP through to 2028, with priority given to infrastructure and socio-economic development.

The budget “deficit is also targeted to gradually reach prepandemic levels of 3 percent percent of GDP in 2028 from this year’s 6.1 percent,” Pangandaman said.