Peso outlook adjusted to P43-P46 per dollar
THE Philippine government has trimmed its revenue targets and adjusted its peso outlook for this year after taking into account the expected impact of lower oil prices on the economy.
But it kept its growth and inflation targets for 2015 and 2016 unchanged — with GDP growth at the 7 percent to 8 percent range, and headline inflation at 2 percent to 4 percent.
Following a meeting on Tuesday of the Development Budget Coordination Committee (DBCC), economic managers said the revenue target for this year was cut to P2.275 trillion from the previous goal of P2.337 trillion.
The DBCC also adjusted its peso assumptions for the year. It now sees the local currency ranging between P43 and P46 to the dollar from its previous forecast of P42 to P45.
“I think 7 percent to 8 percent is within reach,” Socioeconomic Planning Secretary Arsenio Balisacan told reporters after the DBCC meeting, referring to the government’s growth target for this year.
“It’s still early yet, but hopefully we have no major shocks. So far we are seeing quite robust growth for the year,” he said.
The DBCC trimmed the collection targets of the Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC) for this year for separate reasons.
The BIR’s collection target was cut to P1.67 trillion from the previous P1.72 trillion to account for a projected revenue loss of P46.9 billion arising from tax exemptions from de minimis benefits and 13th month pay.
The BOC collection target, on the other hand, was cut by P20 billion—from P456 billion to P436.5 billion—to account for the lower fuel prices.
The DBCC projects Dubai crude oil prices this year to range from $50 to $70 a barrel.
Balisacan noted that investments, coupled with other major indicators, will be the growth drivers of the economy this year.
“We are going to see more investments coming into the country to complement improved government spending, strong household consumption, remittances, business process outsourcing earnings, and services sector,” he said.
The government is also optimistic that GDP growth in the first quarter of the year will be higher than the 5.7 percent growth recorded in the same quarter a year earlier.
“It could be a good one considering that we didn’t have any major shock and we are coming from a slowdown in the first quarter of 2014, plus the fact that we have a lot of funds that were obligated late last year and got into the economic stream this quarter and the next,” Balisacan said.
The DBCC said it kept its inflation target range of 2 percent to 4 percent because it expects continued deceleration in commodity prices, especially food.
The year-to-date average inflation for the first three months stood at 2.4 percent, still within the DBCC’s target band.