DBCC keeps 2015 GDP target, cuts 2016 growth forecast to 7-8%

Prompted by expectations the Philippines economy will miss the government target for 2014, the Development Budget Coordinating Committee (DBCC) cut the growth projection for 2016, the Budget chief said Wednesday.

 

The committee, headed by the Budget secretary, however, kept the 7 to 8 percent target in 2015.

 

"The DBCC has basically agreed to keep the 2015 targets. 

 

"We’ve actually presented them already to Congress, although there’s a slight decrease to 7 to 8 percent from 7.5 to 8.5 percent in 2016," Budget Secretary and DBCC chairman Florencio Abad told reporters in a briefing in Manila.

 

There was a lot of downside for Philippine output last year, from slow government spending and the negative impact of natural disasters, the Budget chief said.

 

The economy grew by 5.3 percent in the third quarter, slower than the actual 6.4 percent in the second quarter and from 6.9 percent a year earlier. This brought the year-to-date average to 5.8 percent.

 

Last November, Socioeconomic Secretary Arsenio Balisacan conceded that even the low-end of the 6.5 to 7.5 percent growth target "would pose a big challenge."

 

Abad said the growth target cannot be changed since the year has already passed but the "realistic" GDP would be between 6 to 7 percent.

 

"In terms of December, it is a big improvement versus November [in terms of spending]," he said.

 

To support growth this year, Abad said the government worked to strengthen the agencies' spending ability through reforms.

 

"By the time we have hit with 2015, there have been familiarities with the changes... They have to shape up with their spending abilities," he said.

 

"Prospects are looking good but, at the same time, we have to temper that with global developments," he added.

 

For 2016, the DBCC lowered the GDP target to 7 to 8 percent from the original 7.5 to 8.5 percent, as maintaining the rate of public spending remains to be seen, Abad noted.  

 

"If you look at it historically, that seems to be the trend. And I think looking at the global environment, as well as, the domestic challenges, it would be prudent to keep it at 7 to 8 percent," the Budget chief said. 

 

"We do have challenges that we need to deal with, some beyond our control, like the dramatic decrease in oil prices, the continuing difficulties of getting key spending agencies to spend according to program," he added. – VS, GMA News