The Development Budget Coordination Committee (DBCC) decided to narrow its economic growth target for this year to take into consideration the impact of Russia’s ongoing invasion of Ukraine.
In a joint statement, the interagency body said it has adjusted the projected gross domestic product (GDP) growth to a range of seven to eight percent instead of seven to nine percent this year.
This despite the stronger-than-expected GDP expansion of 8.3 percent for the first quarter of the year from the 7.8 percent growth in the fourth quarter and reversing the 3.8 percent contraction in the same quarter last year.
The faster-than-anticipated expansion from January to March this year surpassed he pre-pandemic GDP level.
“The Philippine economy’s strong recovery in the first quarter of 2022 has moved us closer to our goal of achieving at least seven percent growth this year. However, in light of heightened external risks such as the Russia-Ukraine conflict, China’s slowdown, and monetary normalization in the US, the full-year growth target was slightly revised from seven to nine percent to seven to eight percent for 2022,” the DBCC said.
The Cabinet-level body includes the Office of the President, the National Economic and Development Authority (NEDA), the Department of Finance (DOF) as well as the Department of Budget and Management (DBM).
“Shifting the entire country to Alert Level 1, increasing the vaccination rate, especially for seniors and children, and reopening all face-to-face classes are crucial to further strengthen domestic demand, cushion the impact of external events, and achieve our growth targets,” the DBCC added.
The committee sees exports of goods expanding by seven percent, slower than the 15 percent projected growth in imports of goods for this year.
Meanwhile, real GDP growth was retained at six to seven percent between 2023 and 2025 as the economy is expected to sustain its strong recovery in the medium term.
The DBCC reviewed the government’s medium-term macroeconomic assumptions, fiscal program, and growth targets for FY 2022 to 2025 to take into account recent domestic trends and external developments.
These adjustments are also in line with the preparation of the FY 2023 National Expenditure Program (NEP).
The DBCC remains strongly committed to exercise prudent macroeconomic and fiscal management in prioritizing expenditures that translate to the betterment of micro communities in the country.
“Our economic progress in the past two years demonstrates that the government’s risk management approach has been effective. With the full implementation of Executive Order No. 166 adopting the 10-point policy agenda, we will be able to accelerate and sustain economic recovery from the COVID-19 pandemic,” it said.