ECONOMIC managers could revise the country’s macroeconomic assumptions in light of the peso’s continued weakness and the possible impact of a second Trump presidency, a Cabinet official said.
“Most likely,” Budget Secretary and Development Budget Coordination Committee (DBCC) Chairman Amenah Pangandaman told reporters on Tuesday.
“But if ever, it (the revisions) would probably be very minimal,” she added.
The interagency DBCC, which reviews and approves macroeconomic targets, revenue assumptions, borrowing levels, the budget and spending priorities, is scheduled to meet next month.
During its last meeting in June, the DBCC retained the economic growth targets for this year up to 2028. Changes made at that time focused on assumptions for 2024, including higher inflation of 3.0-4.0 percent (from 2.0-4.0 percent), faster merchandise exports growth (5.0 percent instead of 3.0 percent), slower imports growth (2.0 percent from 4.0 percent) and a higher peso-dollar rate of P56-58:$1 (from P55-57).
After inflation slowed to 1.9 percent in September, Pangandaman raised the possibility of raising this year’s gross domestic product (GDP) growth goal from 6.0-7.0 percent. The economy, however, markedly slowed to 5.2 percent in the third quarter from 6.4 percent three months earlier, putting the 2024 target at risk.
The peso, meanwhile, this month returned to a record low of P59 to the dollar amid uncertainties over the pace of policy rate cuts and as the greenback strengthened ahead of and following former US president Donald Trump’s win in the Nov. 5 elections.
Trump has pledged to raise tariffs on all goods that enter the US, which has raised a cloud on Philippine exports considering that the US is the country’s biggest trading partner.
“Actually, I’m not sure if they (the DBCC’s technical team) can already factor in the new administration of President Trump,” Pangandaman said, but added that “I think it’s also good to take a look at it.
As for the peso, “we’re still studying it. The BSP (Bangko Sentral ng Pilipinas) is in charge of that, she added.
The BSP, Department of Budget and Management, Department of Finance, National Economic and Development Authority, and the Office of the President comprise the DBCC.
During the June review, the DBCC kept the GDP goal for next year at 6.5-7.5 percent. The exports growth target was kept at 6.0 percent, but that for imports was trimmed to 5.0 percent from 7.0 percent. The peso-dollar rate, meanwhile, was kept at P55-58:$1.
Amid the current uncertainties, Pangandaman said that economic managers were “still confident that we’ll be able to hit our targets.”
“[W]e will see. As of now, we’re trying to still keep up [with] the budget. We’ve been releasing the budget, and the agencies are utilizing their budget now,” she added.
The lower-than-expected third-quarter GDP growth has been blamed in part to a slowdown in government spending, which at 5.0 percent was markedly down from the 11.9 percent posted three months earlier.
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