Gov’t tempers 2022 growth target

  • THE PHILIPPINE government tempered its economic growth target for 2022, as rising inflation and ballooning debt threaten to hamper the economy’s recovery from the pandemic.
  • Finance Secretary Benjamin E. Diokno on 6 Jul 22 said they are now aiming for gross domestic product (GDP) growth of 6.5-7.5% for 2022.
  • This is slightly lower than the 7-8% target set by the Development Budget Coordination Committee (DBCC), but faster than the 5.7% GDP expansion in 2021.
  • The government also set a 6.5-8% GDP target for 2023 to 2028, higher than the DBCC’s 6-7% goal for 2023 to 2025.
  • Mr. Diokno said the new targets are part of a medium-term fiscal framework for 2023-2028, which was approved during the first Cabinet meeting on 5 Jul 22.
  • The government is targeting to bring down the poverty rate to 9% by the end of President Ferdinand R. Marcos, Jr.’s term in 2028, Mr. Diokno said.
  • The Duterte administration had initially aimed to bring down poverty rate to 13-15% by 2022, but this was revised to 15-17.5% due to the pandemic. As of the first semester of 2022, the poverty rate stood at 23.7%.
  • The Finance chief said the debt-to-GDP ratio would be lowered to 60% by 2025. At the end of 1Q22, the ratio stood at 63.5%, exceeding the 60% threshold that multilateral lenders consider suitable for developing economies.
  • He added that the government also seeks to lower the deficit-to-GDP ratio to 3% starting 2026.
  • “We are committed to spend 5-6% of GDP for infrastructure annually from 2023 to 2028,” Mr. Diokno said, adding that the government would pursue public-private partnerships.
  • The Philippines is still aiming achieve to upper middle-income status, although Mr. Diokno said this would likely be achieved by the end of Mr. Marcos’ term.
  • The Philippines had originally targeted to graduate to the upper middle-income status by 2022, but this was derailed by the coronavirus pandemic.
  • Mr. Diokno said the Marcos government would push for the completion of the Duterte administration’s Comprehensive Tax Reform Program (CTRP).

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