ECONOMIC TEAM LOWERS ’22 GROWTH PROJECTION
PRESIDENT Ferdinand “Bongbong” Marcos Jr.’s economic team is now expecting the Philippine economy this year to grow 6.5 percent to 7.5 percent— slightly lower than the projection of the previous administration.
Despite this, Finance Secretary Benjamin E. Diokno said the Philippines is still projected to have the highest growth in the region not only for this year, but also next year among members of the Association of Southeast Asian Nations (Asean) Plus ree despite the risks posed by “elevated” inflation.
“When I say Asean Plus ree, that Plus ree means Japan, South Korea, and China, okay. So we are—the Philippines is expected to have the highest growth rate for the next two years,” Diokno said in a Palace briefing on Wednesday.
Citing figures from their Medium Term Fiscal Framework that the economic team submitted on Tuesday to President Marcos Jr., Diokno said they expect the economy to grow 6.5 to 7.5 percent this year as he expects the country to grow at a faster pace in the second quarter, compared to the first quarter’s 8.3 percent on the back of the full reopening of the economy.
“Q2 2022 will hit double-digit growth. at’s my bet,” Diokno separately told finance reporters in a message.
While Diokno said he considers their GDP growth expectation for the year “conservative,” this is lower than the 7 to 8 percent projected by the Cabinet-level Development Budget Coordination Committee (DBCC) in May this year.
Sought whether the new DBCC under the Marcos administration will likely adopt these growth assumptions on Friday, Diokno separately told the BUSINESSMIRROR that they “will discuss” this.
Starting next year until 2028, Diokno said they expect the country’s economy to grow by 6.5 to 8 percent annually. is is even more
bullish than the DBCC GDP growth assumptions previously adopted under the Duterte administration of 6 to 7 percent for 2023 to 2025.
Meanwhile, Diokno said the Bangko Sentral ng Pilipinas expects “elevated inflation for the next few months,” pushing the annual average inflation this year to 5 percent.
is will then taper down to 4.2 percent in 2023 before settling within the government’s 2 to 4 percent target band at 3.3 percent in 2024.
“is is a problem faced by many countries. You cannot cut inflation overnight. It has to be gradual,” Diokno said.
On Tuesday, the Philippine Statistics Authority (PSA) reported that the country’s inflation rate in June hit 6.1 percent, the highest since October 2018 when inflation averaged 6.9 percent. Year-to-date, inflation averaged 4.4 percent as of June.
‘Misunderstood’
LATER on the day, President Ferdinand “Bongbong” Marcos Jr. disagreed with the 6.1-percent inflation rate reported by the PSA, saying “we are not that high.” But Diokno said Marcos was just “misunderstood,” noting that what the President had in mind was the fullyear inflation figure of 4.4 percent.
Nonetheless, the finance chief assured the public that the government is doing its best to arrest the quickening inflation through addressing constraints in food, energy, transportation and logistics sectors, such as continuing the government’s importation of products that are short in supply.
As a form of targeted relief to those reeling from rising transportation costs, Diokno also said the Marcos administration will continue the government’s grant of P6,500 fuel subsidies to drivers, farmers, and fisherfolk.
In March this year, the Department of Budget and Management under the Duterte administration released a total of P3 billion for the implementation of Department of Transportation’s Fuel Subsidy Program (P2.5 billion) and the Department of Agriculture’s Fuel Discount Program (P500.0 million) to provide targeted assistance to affected sectors and cushion the impact of the consecutive oil price hikes.
“Now, considering that all prices are expected to remain elevated in the near term, the government will expedite the release of the second tranche of subsidies for the transport sector,” Diokno said. “is will be funded from the windfall tax from fuel oil.”