The inter-agency Development Budget Coordination Committee on Tuesday maintained the growth forecast for the Philippines at 6.5 percent to 7.5 percent for 2017 on strong macroeconomic fundamentals and despite external uncertainties.
“This implies that we are not affected on what’s going on. Trump presidency does not affect us,” Budget Secretary Benjamin Diokno told reporters at the press briefing of the 2nd DBCC meeting under the Duterte administration.
The DBCC also maintained the 7 percent to 8 percent growth target for 2018 to 2022.
“No compelling reading to change it. We have same growth drivers and essentially same risks and uncertainties next year,” Economic and Planning Secretary Ernesto Pernia said.
The committee, however, adjusted the foreign exchange assumptions for 2017 to P48 to P50 per US dollar from the previous estimates of P45 to 48. It also adjusted the foreign exchange assumption for 2018 to P48 to P50.
“Basically we’re comfortable with 50 per us dollar for upper bound of exchange rate basically because we have steady inflow of dollars,” Diokno said.
The Libor rate and Dubai crude oil projections were also unchanged at 1 to 2 percent for 2017 and $40 to $55 per barrel, respectively.
The DBCC, however, reduced the export growth target to 2 percent and 5 percent for 2017 and 2018, respectively, and kept import expansion steady at 10 percent for 2017 to 2018.
It maintained the borrowing program at a 80:20 ratio in favor of domestic financing.
The Asian Development Bank last week upgraded its 2016 growth forecast for the Philippines to 6.8 percent from the previous estimate of 6.4 percent, following three quarters of strong growth.
The Manila-based multilateral lender, in its Asian Development Outlook supplement report, also revised upward the 2017 growth outlook for the country to 6.4 percent from 6.2 percent.
“Such brisk growth is expected to ease as the impact of spending for the May elections fades, and in light of global economic uncertainties. In 2017, domestic demand will continue to underpin economic growth,” ADB said.
“In the Philippines, robust domestic demand across the economy spurred stronger-than-expected GDP growth at 7 percent year on year in the first three quarters. The biggest contributor to growth from the demand side was investment, both public and private,” the bank said.
The Philippine economy grew 7 percent in the first three quarters, on strong domestic demand.
