PH GDP growth forecast cut to 7-8% this year

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PH GDP growth forecast cut to 7-8% this year
The Development Budget Coordination Committee said the revision in GDP factored in risks stemming from the Russia-Ukraine war, China’s slowdown, and monetary normalization in the United States.
  • GDP growth forecast cut to 7-8% this year
  • Growth assumption for this year revised from 7-9%
  • The Development Budget Coordination Committee cites heightened external risks such as the Russia-Ukraine war, China slowdown, and US monetary normalization as reasons for the revision
  • Growth assumptions of 6-7% for 2023-2025 unchanged as DBCC expects the economy to sustain its strong recovery over the medium term
  • Imports are forecast to grow 15% from 10%
  • Exports seen rising 7% from 6%

The Philippines’ GDP growth forecast has been cut to 7-8% this year from 7-9% in light of heightened external risks.

The Development Budget Coordination Committee (DBCC) in a statement said the revision factored in risks stemming from the Russia-Ukraine war, China’s slowdown, and monetary normalization in the United States.

The committee noted that the 8.3% gross domestic product (GDP) growth in the first quarter of 2022 surpassed pre-pandemic levels and moved the country closer to at least 7% growth this year.

Growth assumptions for 2023-2025 were retained at 6-7% as DBCC said it expects the economy to sustain its strong recovery over the medium term.

Growth forecasts for imports and exports were also revised. Imports are now forecast to grow 15% in 2022, from the previous 10%, and to 6% from 8% in 2023. For 2024 and 2025, imports are expected to grow 8%.

For exports, growth is expected to hit 7% in 2022, a notch up from 6% in the previous forecast. For 2023-2025, export growth is retained at 6%.

As DBCC expects economic activity to pick up continuously over the medium term, it has revised revenue collection projections upward to P3.633 trillion, or 15.3% of GDP for 2023, and to P4.063 trillion, or 15.6% of GDP, for 2024.

Revenue collections in 2025 are also expected to increase further to P4.549 trillion or 16.1% of GDP.

With higher revenue collections expected next year, DBCC proposed a 2023 national budget of P5.268 trillion or 22.1% of GDP.

DBCC primarily reviews and approves 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 fiscal program.

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