Government trims 2019 GDP growth range target

MANILA, Philippines — The government has trimmed its economic growth target for 2019 to a range of six percent to 6.5 percent, following a periodic review of the inter-agency Development Budget Coordination Committee (DBCC) yesterday.

In a press briefing, DBCC chairman and acting Budget Secretary Wendel Avisado said the country’s gross domestic product (GDP) is now projected to expand by six percent to 6.5 percent this year, narrower than the previous full-year goal of six percent to seven percent.

Socioeconomic Planning Undersecretary Rosemarie Edillon said the committee decided to adjust the GDP growth target based on the actual figures in the first three quarters of the year.

“For the year, we’re actually proposing a tighter band because we already have the first quarter to third quarter numbers. But we still think (we can meet) the range of six percent to 6.5 percent, because if we say it’s six percent to seven percent, then it’s no longer credible,” Edillon said during the briefing.

Avisado said the government’s GDP growth target in the next three years was pegged at 6.5 percent to 7.5 percent, which remains unchanged from the 2020 target, but lower than the previous goal for 2021 and 2022 (seven percent to eight percent).

Meanwhile, the DBM official said the government’s inflation outlook is estimated at 2.4 percent for 2019, lower than the previous assumption of 2.7 percent to 3.5 percent.

Inflation is also projected to settle within the two percent to four percent target range from 2020 to 2022.

“In addition, the assumption for the US dollar price of Dubai crude oil per barrel has been adjusted downwards in the medium-term. For 2019, the projected range has been narrowed to the range of $63 to $64 per barrel. From 2020 to 2022, the price range is now projected to average between $55 to S70 per barrel,” Avisado said.

Likewise, he said the DBCC’s currency exchange assumption for 2019 was also narrowed down to a range of P51 to P52 against the dollar, as compared to the previous estimate of 51 to 53. For 2020 to 2022, the exchange rate is seen to settle at 51 to 54 against the dollar.

Avisado said the 364-day Treasury bill rate is also projected to reach 5.1 percent to 5.3 percent in 2019 and 3.5 percent to 4.5 percent in 2020 until 2022, while the six-month London Interbank Offered Rate is estimated to range from 2.3 percent to 2.4 percent in 2019, and 1.5 percent to 2.5 percent from 2020 to 2022.

Meanwhile, the DBCC chairman said the goods export growth assumption for 2019 was revised downward to one percent for 2019 and four percent in 2020--from the previous estimate of two percent and six percent, respectively--due to continuing unresolved trade tensions between the US and China.

“However, the assumptions for 2021 and 2022 are retained at six percent as global economic activity is expected to recover in the medium term,” he added.

For goods imports, Edillon said the assumption was adjusted lower to two percent from seven percent for 2019, but maintained at eight percent for 2020 to 2022.

“This is supported by the robust domestic growth outlook,” she said. 

On the other hand, DBCC said estimated services exports growth was maintained at nine percent from 2019 to 2022. However, services imports growth is projected at two percent for 2019--lower than the previous estimate of three percent--but retained at four percent in 2020 and five percent in 2021 and 2022.