MANILA - The Philippines has lowered its target growth range for 2024 and is slightly less optimistic about the outlook for 2025 due to high inflation and an anticipated slowdown in the global economy, its economic planning minister said on April 4.
The government now expects the economy to grow between 6 per cent and 7 per cent in 2024, from a 6.5 per cent to 7.5 per cent projection last December, with the target range for 2025 narrowed to 6.5 per cent to 7.5 per cent, from 6.5 per cent to 8 per cent, Dr Arsenio Balisacan told a media briefing.
The lower growth goals also took into account 2023’s below-target 5.6 per cent economic expansion, oil price movements and expected trends in inflation and the foreign exchange market, the minister said.
Elevated food prices and possible hikes in wages and transport costs could also dampen consumer spending, he added.
“On the external front, the global economic slowdown may weaken external demand while increasing geopolitical and trade tensions could disrupt supply chains,” Dr Balisacan said.
“Despite the anticipated risks, we remain optimistic about the country’s sustained growth momentum.”
The 6.5 per cent to 8 per cent growth projections for 2026 to 2028 were kept unchanged.
The government also raised its budget deficit ceilings for the 2024 to 2028 period to allow for greater flexibility to fund its infrastructure programme.
“We need to continue borrowing. It’s not in our interest to drastically reduce that deficit because that then will impact on growth,” Dr Balisacan said, adding that roads and bridges funded by loans will raise the economy’s potential and boost productivity.
Foreign exchange assumptions in 2024 were narrowed to 55 to 57 pesos against the US dollar, but were kept at 55 to 58 pesos against the greenback from 2025 to 2028.
Inflation targets were kept at 2 per cent to 4 per cent until 2028.
In 2025, the government plans to propose to Congress a 7.5 per cent increase in the national budget to 6.2 trillion pesos (S$148 billion) from 2024’s 5.77 trillion pesos.
REUTERS
