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Philippines: Economic managers retain growth targets
MANILA, Philippines – The government is retaining its economic growth targets over the medium term as it expects the country’s macroeconomic fundamentals to remain stable, the inter-agency Development Budget Coordination Committee (DBCC) said Friday.
Budget Secretary and DBCC chairman Benjamin Diokno said gross domestic product (GDP) growth forecast remains unchanged at 6.5 percent to 7.5 percent in 2017, and seven percent to eight percent from 2018 to 2022.
“The DBCC forecasts sustained economic growth in the Philippines as macroeconomic fundamentals including imports remain stable, while exports are expected to improve,” the DBCC said in a statement.
“Furthermore, the expansionary fiscal policy of the government is expected to boost the performance of the Philippine economy,” it added.
According to the DBCC, the Duterte administration’s infrastructure development program, dubbed “Build, Build, Build,” and the increase in public spending for human capital and social protection are expected to drive GDP growth over the medium term.
The DBCC said it has also maintained assumptions for growth prospects, including inflation rates, interest rates and imports, while it sees improvements in exports.
Economic managers expect inflation rate to remain stable at two to four percent from 2017 to 2022, based on estimates of the Department of Finance that higher excise taxes on petroleum, automobiles and sugar-sweetened beverages would have minimal effect on prices.
The DBCC likewise retained Dubai crude oil price assumptions at $40 to $55 per barrel in 2017, $45 to $60 per barrel in 2018, and $50 to $65 per barrel from 2019 to 2022.
Interest rate assumptions for the 364-day Treasury bills also remained at 2.5 percent to four percent, while foreign interest rates assumptions stayed at one percent to two percent in 2017 and 1.5 percent to 2.5 percent from 2018 to 2022.
On the other hand, the DBCC slightly adjusted its foreign exchange rate assumptions to P48 to P51 per US dollar from 2018 to 2022, in response to the tightening of the US Federal Reserve’s monetary policy.
The DBCC has also adjusted upwards its assumptions on export growth from two percent to five percent this year, from five percent to seven percent in 2018, and from seven percent to nine percent in 2019. Thereafter, export growth is projected to steadily grow at nine percent from 2020 to 2022.
“This is consistent with the observation that global trade is picking up, so we adjusted our exports (assumptions),” Diokno said.
Import growth, meanwhile, is seen at 10 percent from 2017 to 2019, and at 11 percent from 2020 to 2022.
Source: http://www.philstar.com/business/2017/06/11/1708655/economic-managers-retain-growth-targets