The Development Budget Coordination Committee (DBCC) Friday adjusted the 2022 growth target from 7-8 percent to 6.5 to 7.5 percent and raised the inflation goal from 3.7 to 4.7 percent to 4.5-5.5 percent.

''The increase in household consumption and private investments, along with a robust manufacturing industry, high vaccination rate, improved healthcare capacity, and the upward trend on tourism and employment have allowed us to safely re-open the economy and register a positive growth for the first three months of 2022,'' said Budget Secretary Amenah Pangandaman as she read the DBCC statement

''This momentum is expected to continue for the rest of the year, with the GDP growth assumption slightly adjusted to 6.5 to 7.5 percent in consideration of recent external and domestic developments. This growth will be sustained and expanded to 6.5 to 8.0 percent in FY 2023 to 2028, it added.

For inflation, the assumption for 20222 ''remains elevated and is projected to range from 4.5 to 5.5 percent, following the uptick in prices of fuel and food as a result of the ongoing Russia-Ukraine conflict and disrupted supply chains," the DBCC said

"It is slightly adjusted to 2.5 to 4.5 percent for 2023, and is seen to return to the target range of 2.0 to 4.0 percent by 2024 until 2028," she said.

Pangandaman said the the assumption for the price of Dubai Crude is set at $70 to 90 per barrel for 2024 to 2028 as oil supply is expected to catch up and stabilize over the medium-term."

"The PhP-USD exchange rate assumption for 2023 to 2028 is projected at P51 to P55 against the US dollar due to heightened global uncertainty such as the aggressive monetary policy tightening by the US Fed, market aversion amid Russia-Ukraine conflict, and increased global oil prices," she said

She added that imports growth is forecast at 8 percent for 2024 to 2028, while the goods exports growth is projected at 6 percent for 2023 to 2028.

However, Pangandaman said "revenue collections are projected to show a gradual, upward trend over the medium-term from P3.633 trillion (15.3 percent of GDP) in 2023 to P6.589 trillion (17.6 percent of GDP) in 2028."

"This will be achieved through the continued implementation of existing tax policy and tax administration reforms, bolstered by a robust economic growth," she noted.

On the other hand, Pangandaman said that the disbursements for 2022 to 2023 will be maintained above 20 percent of GDP at P4.955 trillion and P5.086 trillion, respectively, to ensure continuous implementation of priority programs on infrastructure and socio-economic development, among others.

"Disbursement will further increase over the medium-term from P5.402 trillion (20.7 percent of GDP) in 2024 to P7.712 trillion (20.6 percent of GDP) in 2028," she said.

"Given the revised revenue and disbursement program, the deficit will be gradually reduced by at least 1.0 percent every year starting at 6.1 percent of GDP in 2023 to 3.0 percent of GDP in 2028 to ensure debt sustainability over the medium-term," Pangandaman noted.

"This will be achieved through improved spending efficiency and alignment of budget priorities that are anchored on the administration’s two 8-point socio-economic agendas, one for the near-term and another for the medium-term," she addeed.

She also added that the "government is targeting an infrastructure spending-to-GDP ratio of 5 to 6 percent annually between 2023 to 2028, and a 9.0 percent poverty rate by 2028. The targets shall be anchored on the implementation of coherent strategies, policy discipline, and fiscal sustainability." Robina Asido/DMS