Philippines: Despite high inflation, government keeps growth targets

MANILA, Philippines — The government is keeping its growth target for next year, even as sustained increases in inflation may slow down the economy next year, the National Economic and Development Authority (NEDA) said.

Socioeconomic Planning Secretary Arsenio Balisacan told reporters on the sidelines of the 48th Philippine Business Conference and Expo yesterday that the government is still sticking to its growth target for next year.

“I think we will see the situation when we see the (gross domestic product) numbers next month for the third quarter and then in January, we’ll see the fourth quarter,” he said.

The government has set an economic growth target of 6.5 to eight percent for 2023.

For this year, the government is aiming for a 6.5 to 7.5 percent economic growth.

As the economy is still in the final stages of opening up, Balisacan said there are still many sectors that could drive growth.

He said further easing of travel restrictions by removing requirements for tourists would support growth.

Earlier this week, he said sustained increases in inflation this year and in 2023 would cause a slowdown in economic growth, translating into a GDP level lower by 0.6 percentage point than its expected level next year.

Inflation accelerated to a four-year high of 6.9 percent in September from 6.3 percent in August due to faster upticks in food prices.

Balisacan said the government wants to ensure that current developments, including high inflation, would not affect the ability to meet the country’s economic growth goal in the medium term.

He said this includes avoiding the mistakes in the past such as universal subsidies and removal of value-added tax for certain commodities that are applied universally.

Instead, he said the government would go for targeted support for farmers and fisherfolk, as well as the transport sector.

As prices remain elevated, he also said the economic team is recommending the extension of the implementation of Executive Order 171 issued by the previous administration last May covering reduced tariffs on rice, pork, corn and coal.

Under the EO, the lowered tariffs would be in effect until December of this year.

“We want to make sure that we don’t go into a higher tariff regime as prices are going up,” Balisacan said.

He said the consultations with the different sectors for such are expected to start soon and would have to be completed before the end of December.