PH keeps 6-7% growth target for 2023

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  • The Development Budget Coordination Committee maintained its target of 6% to 7% economic growth in 2023
  • Growth projections for imports and exports have, however, been downgraded
  • For 2024, growth targets have been narrowed to 6.5% to 7.5% from the previous expectation of 6.5% to 8%,
  • Growth for 2025 to 2028 remain at 6.5% to 8%

The Development Budget Coordination Committee kept the Philippines’ growth target at 6% to 7% in 2023 but cut the import and export growth projections.

In a statement following its latest review, DBCC maintained the growth assumption for 2023, citing a 5.5% GDP expansion in the first three quarters and a GDP per capita surpassing pre-pandemic levels.

Growth targets for 2024, however, have been narrowed to 6.5% to 7.5% from the previous expectation of 6.5% to 8%. The growth assumption of 6.5% to 8% for 2025 to 2028 has been maintained.

The projection for goods imports in 2023 has been adjusted to -3% in contrast to the 2% projection in June. The 7% expected increase in imports for 2024 was maintained.

The growth of goods exports was also revised downward in 2023 to -4% from 1% previously, and is expected to grow by 5% in 2024 albeit down from the previous forecast of 6%.

DBCC attributes the 2024 export growth to increased demand for semiconductors, while goods imports are expected to rise due to infrastructure investments and increased domestic production capacity.

For 2025 to 2028, goods exports and imports growth rates are expected to return to their pre-pandemic levels of 6% and 8%, respectively, reflecting global and domestic demand.

The 2023 average inflation rate is seen at 6% and expected to return to the target range of 2% to 4% in 2024 until 2028.

Dubai crude oil price assumptions for 2023 narrowed to $82 to $85 per barrel. In 2024, it is projected to be from $70 to $90 per barrel, dropping to $65 to $85 per barrel in 2025 to 2028.

The peso is expected to trade at P55.50 to P56 against the US dollar in 2023. From 2024 to 2028, it is expected to range from P55 to P58, supported by structural foreign exchange inflows and ample reserves.

The revenue target for 2023 was revised upward to P3.847 trillion from P3.729 trillion and seen further rising to P6.622 trillion due to anticipated tax measures promoting environmental sustainability.

The proposed 2025 national budget is set at P6.120 trillion, equivalent to 20.5% of GDP.

READ: DBCC keeps PH economic growth forecasts for 2023-2028