The government has lowered its growth target for this year given a “very challenging external environment.”
The interagency Development Budget Coordinating Council (DBCC) on Monday said it had trimmed the 2016 gross domestic product growth (GDP) goal to 6.8 percent to 7.8 percent, down from 7 percent to 8 percent.
Targets for 2017 to 2019 were also announced following the economic managers’ meeting.
GDP growth next year is expected to hit a lower 6.6 percent to 7.6 percent, with the 7 percent to 8 percent range returning for 2018. For 2019, the economy is expected to slow slightly to 6.9 percent to 7.9 percent.
“This is in consideration of the very challenging external environment,” said Rosemarie Edillion, assistant director general at the National Economic and Development Authority, of the lower 2016 target.
She cited a slowdown in China, declining oil prices that are putting pressure on Middle East countries that host overseas Filipino workers, the ongoing El Nino weather pattern and the impact of delayed infrastructure projects as among the risks to growth.
Robust domestic demand, however, is expected to make up for the negative impact, she said, adding that investments would drive growth on the demand side while industry and services would boost the supply side.
The DBCC, meanwhile, maintained the inflation target at 2 percent to 4 percent for 2016 to 2019.
Oil prices are expected to range between $45 to $60 per barrel this year, before going up to $50 to $65 in 2017 and $50 to $65 per barrel in 2018 to 2019.
The peso-US dollar exchange rate forecast was raised to P45 to P48 per dollar for 2016 to 2019, from P43 to P46, “because of the general strengthening of the US dollar.”
The government missed its 7 percent to 8 percent growth target last year, with GDP slowing to 5.8 percent from the 6.1 percent recorded in 2014.