Economic managers on Monday decided to maintain existing growth targets but adjusted other assumptions for this year up to 2028 following a review of the government's priorities and developments here and abroad.
The gross domestic growth (GDP) goals for 2023 and 2024-2028 were kept at 6.0-7.0 percent and 6.5-8.0 percent, respectively, but that for this year's inflation was raised to 5.0-7.0 percent from the 2.4-4.5 percent announced last December.
"The average inflation rate assumption for 2023 is increased ... given the persisting high prices of food, energy, and transport costs," the National Economic and Development Authority (NEDA) said in a statement.
"Nevertheless, the government ... is committed to pursuing an all-of-government approach to continuously implement immediate and medium-term strategies to alleviate inflation, ensure food and energy security, and return to the target range of 2.0 to 4.0 percent between 2024 and 2028," it added.
Projected Dubai crude oil prices were lowered to $70-90 per barrel (bbl) for this year from December's $98-100/bbl given a slowdown in global demand. The outlook for 2024 was kept at $70-90/bbl — the forecast for 2024-2028 in December — while that for the following four years was lowered.
"The latest forecasts suggest that global crude oil prices will continue to decline in 2024 before stabilizing at $60-80 per barrel between 2025 and 2028 as the latest forecasts suggest falling global crude oil prices over the medium term," the NEDA said.
The peso-dollar rate was forecast to average P53-57:$1 this year, improving from P55-59:$1 previously, while that from 2024 to 2028 was kept at $53-57 versus the greenback.
"This positive outturn is attributed to the BSP's (Bangko Sentral ng Pilipinas) policy normalization measures, as well as expected inflows from improvements in tourism revenues and OFW (overseas Filipino worker) remittances due to the reopening of the country's economy," the NEDA said.
The expected growth in imports and exports of goods was kept at 4.0 percent and 3.0 percent, respectively, for 2023. The 2024-2028 target was also unchanged at 8.0 percent for imports and 6.0 percent for exports.
Services exports, meanwhile, were forecast to improve this year given a tourism recovery and a resilient outsourcing sector. The 2023 assumption was raised to 17 percent from 12 percent while that for 2024 was adjusted to 16 percent from 6.0 percent.
Estimates for services imports were also increased to 11 percent and 10 percent from 8.0 percent, respectively, for 2023 and 2024-2028.
"The trade assumptions reflect the gradual normalization of economic activity both globally and domestically," the NEDA said.
Revenues, meanwhile, are expected to improve to P3.73 trillion this year from P3.706 trillion. Projections for the next five years were also revised to P4.184 trillion, P4.692 trillion, P5.255 trillion, P5.896 trillion, and P6.622 trillion, respectively, from P4.198 trillion, P4.645 trillion, P5.211 trillion, P5.846 trillion, and P6.583 trillion.
Spending targets were also tweaked to P5.228 trillion this year from P5.177 trillion.
Those for 2024-2028 were adjusted to P5.547 trillion, P5.888 trillion, P6.372 trillion, P7.015 trillion, and P7.773 trillion from P5.556 trillion, P5.844 trillion, P6.320 trillion, P6.954 trillion, and P7.721 trillion.
"This will enable the government to implement priority programs and strategies outlined in the 8-point Socioeconomic Agenda and the PDP (Philippine Development Plan) 2023-2028," the NEDA said.
The 2023 deficit target was raised to P1.499 trillion from P1.471 trillion in December. Shortfalls for the next five years were set at P1.362 trillion, P1.196 trillion, P1.117 trillion, P1.119 trillion, and P1.152 trillion from the previous P1.358 trillion, P1.2 trillion, P1.109 trillion, P1.109 trillion, and P1.138 trillion.
"Following the revised revenue and disbursement program, we will maintain our commitment to fiscal sustainability by adhering to the target deficit for the period 2023 to 2028, which shall progressively decline from 6.1 percent of GDP in 2023 to 3.0 percent of GDP in 2028," the NEDA said.
The revised targets were set by the interagency Development Budget Coordination Committee, which is comprised of Budget Secretary Amenah Pangandaman, Finance Secretary Benjamin Diokno, Socioeconomic Planning Secretary Arsenio Balisacan, and BSP Governor Felipe Medalla.
Source: The Manila Times