Philippines sticks to its 5-year GDP growth targets on economic momentum

April 24, 2023 - 5:28 PM
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Commuters pass through an elevated pedestrian walkway on Commonwealth Avenue in Quezon City, metro Manila, May 23, 2018. (Reuters/Dondi Tawatao)
  • Philippines to weather external headwinds – minister
  • Government committed to battle inflation
  • Deficit-to-GDP to continue decline until 2028

 The Philippines on Monday maintained its economic growth targets over the next five years, citing momentum from increased domestic demand and better labor conditions that would allow its economy to withstand external challenges.

Gross domestic product (GDP) is targeted to grow by 6.0% to 7.0% this year, slower than the 7.6% uptick in 2022, according to the Development Budget Coordination Committee (DBCC), an inter-agency panel that includes top central bank, finance, budget and economic planning officials.

The committee said GDP would pick up to 6.5% to 8.0% annually for the period between 2024 and 2028.

“There is scope for continuing to grow robustly despite the external headwinds,” said Economic Planning Secretary Arsenio Balisacan. “The economy is quite robust at this point.”

The panel took into consideration risks posed by geopolitical and trade tensions, a possible global economic slowdown, as well as weather disturbances in the Philippines.

It expects inflation to register at 5% to 7% this year, returning to within the government’s 2% to 4% target by the fourth quarter, adding it was committed to taking proactive measures to bring inflation down.

Inflation slowed for a second straight month in March to 7.6%.

The DBCC expects the peso currency to move between 53 and 57 to the dollar this year, from 55 to 59 estimate in December, and to continue at that level until 2028, it said.

Balisacan said service exports were seen growing 17% in 2023 and 16% in 2024, from 12% and 6.0%, respectively, will lend further strength to the peso.

On the fiscal side, the deficit-to-GDP was expected to decline annually from 6.1% this year to 3.0% in 2028.

—Reporting by Neil Jerome Morales; Editing by Martin Petty