The Duterte administration’s economic managers on Tuesday maintained the official gross domestic product (GDP) targets for this year and next, saying there are no compelling reasons amid global and domestic developments to adjust the numbers.
However, the Development Budget Coordination Committee (DBCC) adjusted its trade and foreign exchange rate assumptions for 2017 and 2018.
The inter-agency body that sets the government’s macroeconomic, revenue and spending targets still expects the economy, as measured by GDP, to grow within 6 percent to 7 percent this year.
The 2017 GDP growth target was also retained at 6.5 percent to 7.5 percent.
“No compelling reason to change it. We have the same growth drivers, and essentially same risks and uncertainties next year,” Socioeconomic Planning Secretary Ernesto Pernia said during a news conference after a DBCC meeting at the Department of Budget and Management.
Budget and Management Secretary Benjamin Diokno said the Philippines is not affected by what is going on in the global environment, particularly by the Donald Trump presidency starting next month.
For 2018, the DBCC also maintained the GDP target at 7 percent to 8 percent.
The revenue target for this year was also kept at P2.573 trillion, while the expenditure target was expected at P3 trillion.
The fiscal deficit ceiling for the year was also retained at 2.7 percent of GDP, before widening to 3 percent in 2022.
Finance Secretary Carlos Dominguez 3rd said the economy is now beginning to stir with the impact of higher infrastructure spending. He said the 17 recently approved infrastructure projects are being readied for 24/7 construction works.
The inflation rate target, meanwhile, was retained at 2 percent to 4 percent for 2016 to 2018.
Trade and FX
The DBCC revised downward the export growth target to 2 percent from 3 percent in 2017 and to 5 percent from 6 percent in 2018.
However, it maintained the 10-percent import growth target for the next two years.
The exchange rate assumption was maintained at P45 to P48 per US dollar this year, but ranging from P48 to P50 per US dollar in 2017 to 2018.
“We are comfortable with P50:$1 as an upper bound assumption for the exchange rate because we have a steady inflow of dollars. In the past, we had a crisis in our dollar reserves but that is no longer the case,” Diokno explained.
The peso continued to trade on a weak note against the greenback on Tuesday, losing 3 centavos to settle at P49.99 to a dollar from P49.96 on Monday.
The local currency opened at P49.99:$1 before trading between P49.94 and P50. Total volume reached $363 million, compared with $310 million Monday.
MAYVELIN U. CARABALLO