Budget chief: GDP growth target may be tweaked

Budget Secretary Amenah F. Pangandaman on Wednesday said the government’s 6-8% gross domestic product (GDP) growth target this year may be adjusted after underwhelming 2024 growth and global uncertainties.

“Let’s wait for it. Maybe, we need to adjust. So, if needed, we’ll do the necessary adjustment,” Ms. Pangandaman, who chairs the Development Budget Coordination Committee (DBCC), told reporters on Wednesday.

The DBCC will conduct its first meeting this year in March.

“All the numbers are already in. We already saw our GDP, inflation, but our employment is still very good. We’ll wait for the others… There’s a policy meeting soon. So, once all the numbers are in, and then we’ll check what’s happening with our peers,” Ms. Pangandaman said.

The Philippine economy grew by a weaker-than-expected 5.6% in 2024, falling short of the government’s revised 6-6.5% target.

Asked if the country could hit 8% growth this year, Finance Secretary Ralph G. Recto earlier told BusinessWorld that “6-6.5% [growth] is doable for 2025.”

Department of Budget and Management (DBM) Principal Economist and Undersecretary Joselito R. Basilio said the DBCC will likely retain the 6% lower band for 2025.

“Most likely retain. The lower part is firmer, meaning it won’t be lowered or raised anymore. Given the reasons for achieving the growth target, such as election spending, and agriculture is okay,” Mr. Basilio told reporters.

Mr. Pangandaman said they will also wait for the Bangko Sentral ng Pilipinas’ (BSP) next policy move.

“The BSP has its own thing. They also crunch their own numbers based on the international outlook… Let’s wait for it. Maybe we need to adjust,” she said.

BSP Governor Eli M. Remolona, Jr. over the weekend said they may cut interest rates by 50 basis points (bps) this year. He said the cuts could be delivered in increments of 25 bps each in the first and second half of the year.

The central bank began its easing cycle in August last year, slashing borrowing costs by a total of 75 bps to 5.75% by end-2024.

Meanwhile, Mr. Basilio said the DBCC could revise the revenue and expenditure program for this year to be “more realistic.”

“Depending on the condition in March. It will be there’s Trump on the outside. Then, our budget is still rolling to 2025. Then, depending on what the finalized revenue measures are,” Mr. Basilio said.

The DBCC expects revenues to hit PHP 4.64 trillion in 2025, while expenditure program was set at PHP 6.182 trillion.

It also kept the deficit ceiling at -5.3% of GDP for 2025.

USAID freeze

At the same time, Ms. Pangandaman said she does not see any downside risks yet associated with recent policies announced by US President Donald J. Trump.

“Nothing yet. As of now, it’s just the pronouncements and most of it is just the policy review of the existing orders and previous policy. So, we wait, we wait, we wait until we get their final agenda in this administration,” she said.

The Trump administration on Tuesday announced that it was going to put on leave all directly hired employees of the US Agency for International Development (USAID) globally and recall thousands of personnel working overseas, Reuters reported. 

USAID programs around the world, including the Philippines, were halted after Mr. Trump ordered a freeze on most US foreign aid to ensure this is aligned with his “America First” policy.

“I think, again, what Trump’s administration said is that they will just review, give them a 30-day review of all the aid that they provide to development countries, otherwise. So, ngayon, hintay muna po tayo,” Ms. Pangandaman said in mixed Filipino and English.

Ms. Pangandaman said the government is hopeful that after the review, the US will still provide funding for projects in the Philippines.

Asked if the government can step in and provide the funding instead, she said: “We don’t know yet. The aid that is being given to us by not just the US but also our other development partners is a bit big. So, let’s see if we can.”

National Economic Development Authority Secretary Arsenio M. Balisacan said he sees no significant impact from the suspension of foreign aid. — Aubrey Rose A. Inosante