DOF, IMF to refine economic forecasting
MANILA, Philippines — The Department of Finance will work with the International Monetary Fund to enhance its macroeconomic forecasting model and improve fiscal planning projections.
In a technical assistance report, the IMF said the DOF agreed to integrate the Comprehensive Adaptive Expectations Model (CAEM) into its existing forecasting tools for revenue predictions.
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Meanwhile, the CAEM is an Excel tool for macroeconomic projections that integrates data management, assumptions, sectoral forecasts, and reporting into one framework.
The IMF’s model ensures that projections across key economic sectors are consistent, helping policymakers understand how changes in one area impact others.
The DOF uses specialized tools for macroeconomic analysis and a customized version of the IMF’s GIMF for scenario analysis instead of baseline forecasting.
“The group agrees to adopt CAEM in a paced manner, considering analytical needs, policy priorities, and available resources,” the IMF said.
Likewise, the IMF recommended that the DOF allocate more resources for analytical work to calibrate the model as it integrates it into its forecasting framework.
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Additionally, the fund also urged the department to develop a detailed user manual to preserve institutional knowledge and make it easier to share expertise among its staff.
“These recommendations aim to ensure the DoF Staff can operate, maintain and update the CAEM in a continuous manner, sustaining the enhanced analytical capacity developed through this project, and addressing future analytical needs of the DoF,” the IMF said. /pai
