Marcos Admin Economic Team Increases 2023 Growth Outlook

The economic outlook for the Philippines is looking positive, with the government predicting that the country’s economy will outperform other countries in Asia.

This comes as the Development Budget Coordination Committee (DBCC) has maintained its gross domestic product (GDP) growth target of 6 percent to 7 percent for 2023 and 6.5 percent to 8 percent for 2024 to 2028, despite potential challenges such as geopolitical and trade tensions, global economic slowdowns, and weather disturbances.

Along with the higher economic outlook comes inflation, which is expected to be higher than previously anticipated.

The government had initially projected inflation of between 2.5 percent and 4.5 percent, but now expects it to be between 5 percent and 7 percent in 2023, due to the high prices of food, energy, and transportation costs.

This has been a recurring issue for President Ferdinand Marcos Jr.’s administration that is seemingly giving the government a hard time, as a recent survey showed that a majority of Filipinos disapprove of his government’s performance in controlling inflation.

Despite the expected rise in inflation, the government is optimistic about the country’s economic performance, with GDP growth expected to remain high.

In 2022, the country’s GDP grew a whopping 7.6 percent, surpassing Southeast Asia’s growth rate of 5.6 percent. The government is also hoping to improve revenues in the medium term through proposed tax revenue measures, such as the Passive Income and Financial Intermediary Taxation Act, VAT on digital service providers, and excise taxes on single-use plastics and pre-mixed alcohol.

To further support the economy, the government has lowered its assumption for the price of Dubai crude oil to USD70 to USD90 per barrel and adjusted the peso-dollar exchange rate assumption downwards to PHP53 to PHP57.

Marcos’ economic team expects the exchange rate to remain the same until 2028, driven by expected inflows from improvements in tourism revenues and overseas Filipino remittances. (GFB)