Economic managers may meet to review targets before yearend

The Development Budget Coordination Committee (DBCC) may raise the gross domestic product (GDP) growth target for this year amid slowing inflation and improved government spending, Budget Secretary Amenah F. Pangandaman said on Monday.

This comes after inflation slowed to below 2% in September as food and transport costs declined.

“Given this new development, I actually asked the team already, maybe we can have a special DBCC (meeting) again and we’ll try to look at the numbers,” Ms. Pangandaman, who chairs the DBCC, told reporters on the sidelines of an event.

She noted the DBCC can hold a special, off-cycle meeting within the fourth quarter.

“Maybe we can do it this quarter, especially that the budget is going to be passed soon,” she said in mixed English and Filipino.

The House of Representatives on Sept. 25 approved on final reading the P6.352-trillion national budget for 2025. The Senate plans to approve its version of the General Appropriations Bill by the second week of December.

Asked if economic managers will likely raise this year’s growth target, Ms. Pangandaman said: “Maybe we can revise upward. Let’s see.”

At its last meeting in June, the DBCC retained the 6-7% GDP growth target.

The original target of 6.5-7.5% growth was lowered at the DBCC’s meeting in April, as economic managers took into account ongoing trade and geopolitical tensions and the 5.6% GDP expansion in 2023.

“So, maybe we can review our targets again and hopefully, we will catch up on all the targets that we have,” Ms. Pangandaman said.

The DBCC also targets 6.5-7.5% GDP growth for 2025, and 6.5-8% from 2026 to 2028.

The Budget chief said the September inflation print may prompt the DBCC to revisit its macroeconomic assumptions and targets.

“We’re very happy. So, I think all our reforms are taking place now,” Ms. Pangandaman said, citing the lower import tariffs on rice.

Headline inflation slowed to 1.9% year on year in September from 3.3% in August and 6.1% a year ago. The September print was the slowest in over four years (52 months) or since the 1.6% print in May 2020.

In the first nine months, headline inflation averaged 3.4%, which is also the central bank’s full-year forecast.

The DBCC expects inflation to settle at 3-4% by end-2024 and return to the 2-4% target range from 2025 to 2028.

The slowing inflation print also gives the Bangko Sentral ng Pilipinas “more room to be aggressive” in its policy easing cycle to help the economy grow at a faster rate, Finance Secretary Ralph G. Recto said last week, citing September inflation data.

BSP Governor Eli M. Remolona, Jr. earlier said the Monetary Board can deliver a 25-basis-point cut at its Oct. 16 meeting, followed by another cut at its Dec. 19 meeting.

Ms. Pangandaman also said she expects better state spending to drive economic growth.

“On the part of the DBM (Department of Budget and Management) and the National Government agencies, we are looking at their expenses and (budget) utilization,” she said in mixed English and Filipino.

“Hopefully the agencies were able to unload all their budgets, procure by this time, and are in their implementation stages. So, I hope that contributes to our growth.”

The latest data from the Budget department showed that state agencies posted a cash utilization rate of 95%, using PHP 2.96 trillion of the PHP 3.12-trillion worth of notices of cash allocation released as of end-August. — B.M.D.Cruz