DESPITE a looming downward revision to this year’s economic growth target, economic managers are holding on to a 6-percent growth goal for next year, banking on governance cleanups to restore trust among the public and investors.
On the sidelines of the Senate plenary debates on next year’s national budget last Monday, Department of Economy, Planning and Development (DEPDev) Secretary Arsenio M. Balisacan told reporters that the government is still sticking to its 6 to 7 percent growth target for 2026 to 2028.
‘I think we can go on with that. Because, as we have been saying, we have to learn the lessons that we have learned from this year to ensure that they won’t recur next year,’ Balisacan said.
A clean-up in governance and mechanisms, particularly in project planning, implementation and monitoring, will make the system more efficient, according to Balisacan.
‘I think 6 to 7 [percent] should be doable next year. But of course, that assumes that we can really address the issues that have faced us and confronted us,’ the country’s chief economist said.
Balisacan said the economy can still hit a 6-percent growth in the medium term to catch up with its neighbors in the region.
‘The potential of the economy is 6 to 7 percent. So if you are growing below that, you are underutilizing your capacity. You should grow and go back to that growth as soon as we can because otherwise, we won’t achieve the ‘AmBisyon Natin 2040,” Balisacan added.
Balisacan was the architect of the ‘AmBisyon Natin 2040’ when he served as Chief Economist at the tailend of the Benigno S. Aquino III administration. By 2040, the Philippines is envisioned to become a high-income country.
Meanwhile, outgoing Finance Secretary Ralph G. Recto is also expecting that the economy will expand by 5 to 6 percent next year, lower than the Cabinet-level Development Budget and Coordination Committee’s target.
‘Realistically, for next year, [the growth] will be from 5 to 6 [percent] because we’re coming from a low base. And then it will take some time, maybe a quarter, before we can go back to a regular growth rate,’ Recto told reporters.
The country’s fundamentals, Recto assured, are ‘okay,’ and by showing accountability, the trust and confidence of consumers and businessmen will be regained.
DBCC targets to be revised
Despite their optimism, the country’s economic managers will meet and review their macroeconomic targets.
‘There’s going to be a DBCC meeting to talk about the changes,’ Balisacan said, noting that the GDP target for this year is ‘quite likely’ to be revised.
‘Our concern is to ensure that we can mobilize all the resources that have been programmed for the year that are not included in the anomalous projects,’ Balisacan said.
The DBCC is composed of the principals of the Department of Budget and Management (DBM), DOF, DEPDev, as well as the Office of the President and the Bangko Sentral ng Pilipinas.
The role of the DBCC is primarily to review and approve the macroeconomic targets, revenue projections, borrowing level, aggregate budget level and expenditure priorities and recommend to the Cabinet and the President of the consolidated public sector financial position and the national government fiscal program.
Still, Balisacan remains optimistic that the economy will grow at least 5 percent in the fourth quarter this year.
Meanwhile, Recto said the economy will only expand by 4.7 percent to 4.8 percent in the fourth quarter, below the government’s target.
‘What we will miss is the growth rate, unfortunately. But moving forward, everything will be upside. Because we’ve already seen where the problems are,’ Recto added.
Recto: Deficit will be as target this year
The country’s deficit level, however, will be as target at P1.561 trillion this year, according to Recto.
‘Whatever our deficit target is for the year, including the debt, we’re not borrowing more than that,’ the outgoing Finance chief said.
Although the government failed to meet its revenue target in the third quarter, given the slowdown in economic growth, Recto said expenses will be reduced to still meet the deficit target.
‘We’re not reducing capital outlay,’ Recto cleared, but reducing the supplies, materials, as well as travel expenses will help lessen the costs for the government.
The government’s revenue collection reached P3.366 trillion as of end-September this year, up by 2.24 percent from P3.292 trillion a year ago.
This makes up 74.46 percent of the government’s full-year revenue target of P4.520 trillion.