The country is likely to achieve upper-middle-income status in 2023, an outgoing Cabinet official said on Wednesday.
“It’s likely, especially since we broadened the economy’s potential with all the reforms that we have done,” Socioeconomic Planning Secretary Karl Kendrick Chua said during the Kapihan sa Manila Bay.
Philippine gross domestic product (GDP) expanded by 8.3 percent year-on-year in the first quarter, a turnaround from the 3.8-percent contraction in the same period last year. The first-quarter growth was also within the government’s 7 percent to 9 percent target for this year.
Moreover, the Development Budget Coordination Committee on Tuesday slightly revised the full-year growth target from 7.0 percent to 9.0 percent to 7.0 percent to 8.0 percent for 2022.
“Shifting the entire country to Alert Level 1, increasing the vaccination rate, especially for seniors and children, and reopening all face-to-face classes are crucial to further strengthen domestic demand, cushion the impact of external events, and achieve our growth targets,” Chua added.
He said the economy needs to grow by 6.6 percent in the next three quarters to achieve the full-year target.
“That’s doable. The bulk of the growth is going to come from domestic demand and we have to ensure a strong domestic rebound, which we are seeing,” Chua said.
The Philippines had originally targeted to graduate to the upper-middle-income status by 2022, but this was derailed by the coronavirus pandemic.
Moreover, the outgoing Cabinet official said that bring down the retail prices of rice to P20 to P30 per kilo is possible.
“If our support to our rice farmers are very targeted and efficient, then I think that is a possibility,” Chua added.
Earlier, incoming President Ferdinand Marcos Jr. said he would recommend a price cap on rice and mandate government agencies to serve as middlemen in the procurement of harvests under his administration.
It will lower rice prices to P20 to P30 from the existing costs of 38 to P50 per kilogram for the local commercial prices in Metro Manila and P37 to P52 for imported commercial rice.
Chua said bringing the retail price of rice at the level promised by Marcos is possible under a liberalized trade regime, under the Rice Tariffication Law (RTL).
The RTL allowed unimpeded importation of rice but with higher tariffs. The law aims to lower rice prices by flooding the market with imports.
Chua also added that to protect the local industry, the law provides a P10-billion Rice Competitiveness Enhancement Fund (RCEF), which shall be utilized for grants to provide farmers with equipment to improve farm mechanization.
“Under Rice Tariffication, the programs are expected to increase the yield per hectare from four metric tons to five or six metric tons, so that is possible actually,” he said.
The country’s chief economist also pinned hopes that the next administration will not change the RTL as it “is the best model that we have to help farmers and consumers.”
“By removing quantitative restrictions, we were able to address both the needs of consumers for a lower retail price of rice and use the funding from the tariff, which I believe was at P18 billion last year to fully fund the RCEF or Rice Competitiveness Enhancement Fund,” Chua said.