October 8, 2024 | 12:00am
MANILA, Philippines — President Marcos’ economic team is considering an upward revision of its growth targets this year following the sharp drop in inflation and as state agencies ramp up their spending.
The Cabinet-level Development Budget Coordination Committee (DBCC) is expected to hold a special meeting soon to review its macroeconomic assumptions.
Budget Secretary and DBCC chair Amenah Pangandaman said this is in light of the 1.9-percent inflation print last month, dropping to its lowest level in over four years or since May 2020.
“Given this new development, I already asked the team to have a special DBCC so we can look at the numbers,” Pangandaman told reporters on the sidelines of the Public Financial Management Reforms Program launch at the Asian Development Bank on Monday.
“Maybe we can revise upward. Hopefully, we can catch up on all the targets,” she said.
The DBCC last convened in June for its regular meeting. At the time, the economic team retained its six to seven percent gross domestic target (GDP) target for 2024 as the country remained a frontrunner among Southeast Asian economies.
However, the DBCC slightly increased its inflation assumption to a range of three to four percent from the previous target of two to four percent.
From January to September, inflation averaged 3.4 percent which is well within the DBCC’s last inflation assumption.
With the better-than-expected inflation outcome for September, Finance Secretary Ralph Recto already said the full year rate could settle at 3.2 percent.
“We are very happy (with the inflation). I think all our reforms are taking place now, the tariff and all the other interventions,” Pangandaman said.
Pangandaman is referring to the implementation of Executive Order 62 that lowered the tariff on imported rice, which led to a further increase in the volume of rice imports and reduced retail prices.
“I hope we can sustain the inflation until the end of the year because of course, we want to hit our GDP target,” she said.
Apart from slowing inflation, the Budget chief is also banking on increased state spending.
“We are looking at the expenses and the utilization. Hopefully, agencies are able to unload all their budget that they were able to procure and that they are in the implementation stage now so it can contribute to our GDP growth,” Pangandaman said.
Data showed that government spending in August slipped by 0.68 percent to P440.5 billion from P443.6 billion in 2023.
For the eight-month period, however, disbursements rose by 11 percent P3.69 trillion.
The DBCC chair is expecting that government spending will further pick up in the last quarter of the year and boost overall economic growth.
On the other hand, Pangandaman said the 2025 record budget of P6.352 trillion remains on track for signing by mid-December.
Right now, Congress is in recess as lawmakers file their candidacies for the midterm polls. Sessions will resume in the first week of November with the Senate going into plenary for the budget deliberation.
The House of Representatives already approved its version of the General Appropriations Bill and is for transmittal to the Senate.
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