January 29, 2024
MANILA, Philippines — A 2023 economic growth that is lower than the previous year’s 7.6 percent but close to the government’s target will be an acceptable performance, considering the headwinds that the economy faced, the state’s chief socioeconomic planner said.
As the market waits for the Jan. 31 release of 2023 gross domestic product (GDP) numbers, Secretary Arsenio Balisacan of the National Economic and Development Authority (Neda) said he would be happy as long as growth would be close to the Marcos administration’s 6 to 7 percent target range.
What fueled Balisacan’s optimism was his hope that the fourth quarter growth would be better than the third quarter results.
“Our target is at least to hit the lower-end of the range of 6 to 7 [percent]. And, but you know, I’ll be happy if we get so close to it, even if it’s lower,” he said in an interview at the annual reception for the banking community hosted by the Bangko Sentral ng Pilipinas (BSP) on Friday.
Last month, the inter-agency Development Budget Coordination Committee (DBCC) tempered its GDP growth target for 2024 to 6.5 to 7.5 percent, from the previous goal of 6.5 to 8 percent expansion.
What triggered the downgrade was the threat of a prolonged El Niño dry spell, which is predicted to last until the second quarter of this year and may potentially jack up food and energy prices.
Another challenge for the economy is the high interest rate environment that could hurt consumption and investments. Despite inflation easing back to within the government’s 2 to 4 percent target range in December last year, the BSP said it deems it necessary to “keep monetary policy settings sufficiently tight until a sustained downtrend in inflation becomes evident.”
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But the DBCC nevertheless retained its 6 to 7 percent growth goal for 2023 as “momentum is expected to continue for the rest of the year and surpass that of our neighboring countries.”
With the January-September average growth now at 5.5 percent, the economy would have to expand by 7.2 percent in the fourth quarter of 2023 to attain at least the low end of the government’s target band.