GROWTH of the Phiilippine economy is certain, said government and private sector players, but it would not be as high as it was originally forecasted.
On Monday, the Development Budget Coordination Committee (DBCC) adjusted the country’s gross domestic product (GDP) target in 2016 to expand between 6.8 percent and 7.8 percent, lower from the original target of seven to eight percent.
DBCC, an inter-agency cabinet-level group, cited global external factors as a major cause for the trimming of the Aquino administration’s GDP growth target.
Aside from 2016, DBCC also dropped its growth forecast for the next three years.
In 2017, the economy is seen to grow by 6.6 percent to 7.6 percent, and seven to eight percent in 2018. By 2019, GDP growth is expected to between the 6.9 percent and 7.9 percent projections. Last year, the Philippine economy expanded by 5.8 percent.
Local economist Fernando Fajardo is certain that growth in 2016 will be higher than 5.8 percent, basing his projections on the International Monetary Fund’s (IMF) global economic forecast of 3.4 percent to 3.6 percent this year, which is higher than the previous year.
“I see no reason why the Philippines will go at a slower pace (of 5.8 percent) this year, especially with the election, which we already know from the past will boost the GDP,” Fajardo said.
Meanwhile, DBCC also lowered its growth target for exports this year, from six percent to five percent. Imports target, on the other hand, was trimmed down to 10 percent from 12 percent.
On oil prices, DBCC has also revised the original outlook of $55 to $75 per barrel this year down to $45 to $60 per barrel. In addition, the outlook for foreign exchange rate has also been altered. From P43 to P46 to a dollar for 2016 to 2018, this was changed to P45 to P48 to a dollar for 2016 to 2019.
The inflation forecast was kept at two to four percent for 2016 to 2019.
DBCC is composed of the chiefs of the Department of Budget and Management, the National Economic and Development Authority, the Department of Finance, and the Bangko Sentral ng Pilipinas which sits as the commitee’s resource institution.