The Development Budget Coordination Committee (DBCC) will convene soon to reassess its economic targets in light of the Middle East conflict’s widespread impact on the local economy, according to newly appointed Budget Secretary Kim Robert de Leon.
Speaking with reporters on the sidelines of the formal launch of the country’s partnership agreement with the European Union (EU) and the United Nations Development Programme (UNDP) aimed at enhancing public procurement, de Leon said no final adjustments have been made yet. However, he noted that the country’s economic managers are closely monitoring recent macroeconomic developments, which have been adversely affected by the national energy emergency.
“In every DBCC [meeting], we are sensitive [to] developments in the macroeconomic environment. We have seen some changes, so we have to consider all of those in making our assumptions moving forward,” he said on Thursday.
“[W]e cannot say for certain at this point [which specific figures will be revised upward or downward.] We're not yet done. There's no final figure yet because we're really looking at the numbers very closely,” he added.
De Leon, who also serves as DBCC chair by virtue of his position as Budget Secretary, said the committee met following the release of weaker-than-expected first-quarter economic growth data, with gross domestic product (GDP) expanding by just 2.8 percent. The figure marked the third consecutive quarter of slowing growth.
Earlier this year, the DBCC lowered its GDP growth target range to 5 to 6 percent from 6 to 7 percent previously, citing the economic impact of the flood control scandal.
Department of Economy, Planning, and Development (DEPDev) Secretary Arsenio Balisacan said following the release of the first-quarter GDP figures in May that another downward revision to the annual growth target was likely given the effects of the energy shock.
“I think it's a foregone conclusion because of the reality that we are facing,” he said.
“You can't keep persisting with something that's no longer attainable. The world has changed so much since last year, so we have to reflect that in our growth assumptions, among other considerations,” Balisacan added.
On Thursday, de Leon said the government is seeking to accelerate economic activity and recover from the weak first-quarter performance, noting that public spending remains on track for now.
“[A]fter the Q1 figures, we really would like to catch up after the Q1 growth and the inflation that we've had. So we're trying to be bullish about it and utilize whatever tools we can to support the economy,” he said.
“We target to do better than Q1, of course. That's the target. Better than 2.8 [percent.]”
