NEDA adjusts 2024 growth predictions due to El Niño

The National Economic and Development Authority on Wednesday said the country is adjusting its economic growth expectations for the upcoming year due to the anticipated challenges during the El Niño weather phenomenon.

While the goal for medium-term gross domestic product growth of 6.5 percent to 8 percent is still a target, NEDA Sec. Arsenio Balisacan said achieving the upper limit of the said range is no longer feasible for the coming year.

Balisacan mentioned that the government will intensify its efforts to alleviate the effects of El Niño on the agriculture sector.

Various agencies are focused on water, energy, agriculture, health, and other sectors because the impact of El Niño is expected to persist until the second half of next year.

In the Philippines and across various parts of Asia, El Niño typically brings about hot and dry weather conditions, leading to reduced agricultural output and disruptions in water and power provisions.

The Department of Science and Technology said earlier this week that approximately 77 percent of the Philippines, equivalent to sixty-five provinces, may experience moderate to severe drought from February to May next year.

"Managing this El Nino is very crucial," Balisacan said.

"If we intervene enough, early enough, and fast enough, we may be able to reduce upward pressure on prices," Balisacan added.

Regarding this year's projections, the government remains optimistic about achieving the lower end or remaining close to its targeted six percent to seven percent gross domestic product growth.

"Inflation has moderated and the labor market has been performing," Balisacan said.

The inflation rate in the country notably decreased to 4.1 percent in November from 4.9 percent in October, marking the lowest rate recorded in the past 20 months since March 2022.

However, the average inflation rate in the Philippines stood at 6.2 percent from January to November, significantly surpassing the central bank's target range of 2 to 4 percent.

No plans for a tariff reduction on agri-commodities

In the same briefing, Balisacan said the government currently has no plans to decrease import duties on different agricultural commodities further.

Balisacan highlighted that the current available option for the Marcos administration is to extend the most favored nation tariff cuts on rice, corn, and pork beyond 2023.

He emphasized that any additional reduction in the already decreased import duties under Executive Order (EO) No. 10 would require separate consultations with stakeholders.

"That will require a separate process," Balisacan told reporters when asked if the government may consider further reductions in tariffs under the MFN.

"What has been discussed and endorsed by the committee and related matters of the NEDA Board is a proposal to extend the currently reduced tariffs for those commodities," he added.