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GDP growth assumption this year has been lowered by half a percentage point to between 6.5% and 7.5%, from 7% to 8%, to factor in recent external and domestic developments
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Growth projections for 2023 to 2028 is at 6.5% to 8% from 6-7% from 2023 to 2025
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Imports growth has been increased to 18% from 15% for 2022, but retained at 6% for 2023 and 8% annually from 2024 to 2028
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Exports growth remains at 7% for 2022 and 6% annually from 2023 to 2028
The Development Budget Coordination Committee (DBCC) has cut its growth assumption for the Philippine economy this year to between 6.5% and 7.5%, from 7-8% previously, to factor in recent external and domestic developments.
DBCC said it expects the positive growth registered in the first quarter of 2022 will continue for the rest of the year and be sustained and expanded to 6.5-8% from 2023 to 2028. This is slightly higher than the 6% to 7% previous assumptions for 2023 to 2025.
Beating forecasts, the Philippines gross domestic product grew 8.3% in the first quarter of 2022.
DBCC, which now comprises newly appointed officials, said in a statement it had reviewed the government’s medium-term macroeconomic assumptions, fiscal program, and growth targets for 2022 to 2028 to take into account the new administration’s priorities and fiscal strategy, latest domestic developments, and external pressures.
The committee raised imports growth to 18% from 15% for 2022, retained it at 6% for 2023, and 8% for 2024 to 2028. Exports growth, meanwhile, remains at 7% for 2022 and 6% for 2023 to 2028.
Revenue collections are projected to grow gradually over the medium term. DBCC retained the P3.633 trillion (15.3% of GDP) projection for 2023 and P4.063 trillion (15.6% of GDP) for 2024 and forecast that revenues will reach P6.589 trillion (17.6% of GDP) in 2028.
DBCC said this will be achieved through the continued implementation of existing tax policy and tax administration reforms, bolstered by robust economic growth.
The average inflation rate assumption for 2022 remains elevated at a range of 4.5% to 5.5% following the uptick in fuel and food prices due to the ongoing Russian war on Ukraine and disrupted supply chains. DBCC adjusted inflation by half a percentage point to between 2.5% and 4.5% for 2023, and assumed it will return to between 2% and 4% from 2024 through to 2028.
In addition, the government is targeting an infrastructure spending-to-GDP ratio of 5% to 6% annually between 2023 and 2028, and a 9% poverty rate by 2028.
DBCC said the targets will be anchored on the implementation of coherent strategies, policy discipline, and fiscal sustainability. It said overall goals are to create more quality jobs, reduce poverty incidence, and achieve inclusive and resilient growth from 2022 through to 2028.
The committee primarily reviews and approves the macroeconomic targets, revenue projections, borrowing level, aggregate budget level and expenditure priorities, and recommends to the Cabinet and the President the consolidated public sector financial position and the national government’s fiscal program.
