Gov’t 2023 growth target feasible amid rate upticks

MANILA – Hikes in interest rates are not expected to greatly dampen the domestic economy’s 2023 growth, with Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla citing pent up demand and recovery of tourism as drivers of growth.

“I would say that the DBCC (Development Budget Coordination Committee (DBCC) growth targets are still feasible,” Medalla told journalists Tuesday night.

DBCC’s next year growth target ranges between 6.5 to 8 percent, which is also the assumption until 2028.

Its growth assumption for 2022 ranges 6.5 to 7.5 percent.

Economists and multilaterals forecast domestic growth to be around 5 to 6.3 percent next year.

Medalla cited as drivers of his optimism the possible pick-up of international tourism, which is among the major growth contributors for the Philippine economy.

“There’s also still quite a bit of pent up demand,” he said, adding that “postponed capex (capital expenditure) is still there.”

Household final consumption expenditures (HFCE) account for around 70 percent of the economy’s annual output.

In the third quarter of this year, HFCE grew by 8 percent year-on-year.

Growth, as measured by gross domestic product (GDP), in the third quarter rose further to 7.6 percent from quarter-ago’s upwardly revised 7.5 percent, bringing the year-todate average to 7.8 percent.

Aside from domestic consumption and tourism, Medalla said the business process outsourcing (BPO) sector is among the sources of structural dollar inflows for the country.

He said the BPO sector also has “some legs”, noting the additional boost that it has been providing to domestic growth in the past years.

Earlier, Medalla said the recovery of the domestic economy is expected to cushion the impact of the continued hikes in the central bank’s key policy rates.

Since last May, the central bank’s policy-making Monetary Board (MB) has increased the BSP’s key rates by a total of 300 basis points as it bids to help address the accelerating domestic inflation rate.

The rate of price increases breached the government’s 2 to 4 percent tar

GIFT OF ART. December is just around the corner and an art event to end the month of November is but fitting to welcome the season of gift giving. Davao’s largest art organization the Dabawenyo Artists Federation Inc. (DAFI) launched the “Gift Of Art” bazaar last Nov. 25, 2022 at Ayala Abreeza Mall. According to DAFI President Josie Tionko, they wish to do this event annually as to give Davaoenos a variety of options for their gift giving during the Christmas season. DAFI is composed of 15 Davao art groups and galleries. The art bazaar runs until Nov. 30, 2022.