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Philippines: Government keeps economic assumptions for 2017
The government is keeping most of its macroeconomic assumptions for next year, Budget Secretary Benjamin Diokno said.
“For 2017 assumptions, that will be it. My primary concern are the assumptions for the 2018 budget,” he said in a phone interview yesterday.
“The growth targets will be kept,” he added.
The inter-agency Development and Budget Coordinating Committee (DBCC), which Diokno chairs, will meet to prepare the proposed 2018 outlay on Dec. 20.
Under the medium-term plan earlier approved, growth, as measured by gross domestic product (GDP), is targeted between 6.5 and 7.5 percent next year, faster than this year’s six- to seven-percent.
The 2018 budget is targeted at P3.825 trillion under the program, but that would still be reviewed next week, Diokno said. “The budget levels for 2018 are yet to be determined,” he said.
So far, the Philippine economy has performed well, notching a seven-percent GDP expansion from January to September.
Diokno is banking on the Duterte administration’s plan to fast track infrastructure spending by as much as P860.65 billion next year to sustain growth.
The figure is equivalent to around five percent of GDP, a global standard, and up from the 4.2 percent recorded as of September, data showed.
This, even as threat looms as far as revenues are concerned with the passage yesterday at the Lower House of House Bill 4144, which aims to keep the two-tier cigarette excise tax.
While the proposal will initially result into higher revenue, the Department of Finance believes it could result into downshifting that prompts companies to manufacture cheaper cigarettes more to pay less levies.
“I’m not really sure where it (the “sin” tax bill) came from. That may be discussed, but I don’t think that will affect our fiscal projections,” Diokno said.
“It will still have to pass Senate and then presidential approval. It’s a long way to go,” he said.
The proposed P3.35-trillion budget was also approved by the bicameral conference committee yesterday, now just awaiting President Duterte’s signature to become law.
Diokno has repeatedly said that spending will be faster, following years of below-target disbursements, but that his “biggest fear” remains to be agency underspending.
A total of P1.8 trillion of the P1.98-trillion in notices of cash allocation (NCAs) were utilized during the first 11 months, accounting for 91.1 percent of the total.
The figure was slightly down from 92 percent in the same period a year ago. NCA is utilized when agencies get checks from the Bureau of the Treasury to pay for contracted services, signaling disbursement.
Source: http://www.philstar.com/business/2016/12/15/1653428/government-keeps-economic-assumptions-2017