PH may deliver GDP close to 6% minimum growth target this year

An economic growth below 5.6 percent this year would be unacceptable, the National Economic and Development Authority (Neda) chief said, adding that the Marcos administration is working hard to finish 2023 with growth not far from the state’s target.

If ever the government would miss its 6 to 7 percent growth target for this year, Neda Secretary Arsenio Balisacan said an expansion of about 5.8 to 5.9 percent would still be an impressive feat for the economy.

“We are now (as of third quarter) at 5.6 percent, so it cannot be less,” Balisacan told reporters in an interview.

“But I’m not willing to completely give up the 6 to 7 percent target,” he added.

At its final meeting for this year last week, the interagency Development Budget Coordination Committee (DBCC) tempered its gross domestic product (GDP) growth target for 2024 to 6.5 to 7.5 percent, from the previous goal of 6.5 to 8-percent expansion.

The less upbeat outlook next year was expected. At present, the biggest worry for the government is the prolonged El Niño dry spell, which is predicted to last until the second quarter of 2024 and hit 65 provinces in the country, or 77 percent of all provinces in the Philippines.

Headwinds

Another challenge for the economy is the high interest rate environment that could hurt consumption and investments. But the DBCC retained its 6 to 7 percent growth goal for 2023 as “momentum is expected to continue for the rest of the year and surpass that of our neighboring countries.”

With the year-to-date average growth now at 5.5 percent, the economy would have to expand by 7.2 percent in the fourth quarter to attain at least the low-end of the government’s 6 to 7 percent growth target for 2023.

Balisacan said the DBCC kept its outlook for this year partly to keep the credibility of the economic team intact.

“Our job in government is to ensure that your expectations are realized,” he said. “That’s why credibility is important.”