The economic managers of the Duterte administration, collectively as the inter-agency Development Budget Coordination Committee (DBCC), on Wednesday lowered the country’s economic growth targets in light of domestic and external developments.
The gross domestic product (GDP) target range was lowered to 6.0%-6.5% from 6.0% -7.0% in July, according to the DBCC.
The economic growth target for 2020 to 2020 was also revised to 6.5%-7.5% from the original goal of 7.0%-8.0%.
In a press briefing after the DBCC meeting in Manila, National Economic and Development Authority (NEDA) Undersecretary Rosemarie Edillon said the revised growth target this 2019 was a result of the economic performance in first three quarters of the year.
The NEDA official noted that maintaining the growth target at 6% to 7% for 2019 is “no longer credible.”
“If we say, it is 6% to 7% [for 2019],it is no longer credible given that we’ve already had the first three quarters,” Endellion noted.
The GDP clocked in at 5.6% in the first quarter, 5.5% in the second quarter, and 6.2% in the third quarter.
The national accounts in the first three quarters brought the year-to-date GDP to 5.8% on average, or two percentage points short of the original 6%-7% goal.
By trimming the growth targets from 2020 to 2022, the economic team wants to stick to prudent fiscal management, Edillion said.
“Moving forward, we want to stick to prudent fiscal management. So looking also at the different tax reform programs that are there, the revenue projects, we want to maintain a fiscal-deficit-to-GDP ratio of 3.2% and also we want to make sure that the debt does not balloon so that growth is consistent with the fiscal prudence,” she said.
Revenue collection is projected to reach P3.15 trillion in 2019, equivalent to 16.8% of the GDP.
Disbursements are targeted to hit P3.76 trillion this year or 20% of the GDP.
For 2020, revenues are projected to increase to P3.49 trillion or 16.6% of the GDP, while disbursements are programmed at P4.16 trillion or 19.8% of the GDP.
In 2022, the revenue and disbursement projections are estimated to rise to P4.31 trillion or 17% of GDP and P5.12 trillion or 20.2% of GDP, respectively.
“The comprehensive tax reform program can help ensure a reliable revenue base and, more importantly, enhance the modernization of our economy,” the DBCC said.
“Quickly completing the passage of the remaining tranches of the tax reform will ensure a steady revenue flow and equitable sharing for the government’s social and infrastructure programs while securing fiscal stability long into the future,” it said.
The speedy passage of the Corporate Income Tax and Incentives Rationalization Act (CITIRA) will help attract additional investment into the country, while the alcohol and e-cigarette excise tax adjustments will substantially bridge the funding gap for the Universal Health Care program, the DBCC added.
"Given the revenue and disbursement program adopted by the DBCC, the deficit target will be maintained at 3.2 percent of GDP from 2019 to 2022 to sustain the government’s investments in infrastructure and human capital development,” it said. —Ted Cordero/VDS, GMA News