Marcos econ team sees at least 6.5% growth until 2028; reveals debt, poverty reduction targets

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Metro Manila (CNN Philippines, July 8) — The economic team of President Ferdinand “Bongbong” Marcos Jr. expects the economy to expand by at least 6.5% annually throughout his term.

The Development Budget Coordination Committee formally announced on Friday they are projecting economic growth of between 6.5% to 7.5% this year. For the remainder of Marcos’s term from 2023 to 2028, an annual target band of 6.5-8% was set.

The DBCC — composed of the Department of Finance, Department of Budget and Management, and National Economic and Development Authority —  earlier set full-year growth estimates of 7-8% for 2022 and 6-7% from next year until 2025 during the term of former President Rodrigo Duterte.

Economic managers said their projections mean the Philippines will achieve in the next two years the highest growth rate among the Association of Southeast Asian Nations (ASEAN) Plus 3.

ASEAN Plus 3 includes the 10-member ASEAN — the Philippines, Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore, Thailand, and Vietnam — and the group's East Asian partners Japan, South Korea, and China.

The government will strive to trim the deficit-to-GDP (gross domestic product) ratio to the pre-COVID level of 3% this 2026 to 2028 too, added DBM Sec. Amenah Pangandaman. The ratio has ballooned to 8.6% as of last year from 7.6% in end-2020.

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The DBCC also announced a higher inflation target band for 2022 at 4.5-5.5%, compared to its predecessors' 3.7-4.7% range, over the uptick in commodity prices due to the Ukraine-Russia war and global supply chain disruptions.

It expects inflation to average between 2.5% and 4.5% next year before returning to the original 2-4% target band by 2024 until the end of Marcos's presidency in 2028.

The economic team expects revenue collections to grow gradually from ₱3.63 trillion next year, or 15.3% of GDP, to ₱6.58 trillion or 17.6% of the economy in 2028.

Disbursements will be kept above 20% of total economic output until the end of the administration's six-year term, starting from ₱4.95 trillion in 2023 up to the ₱7.71 trillion in 2028.

DOF chief Benjamin Diokno first announced some of these targets during Wednesday's Palace briefing. He said they aim to bring down the national poverty rate to single-digit — 9%. As of the first semester of 2021, the incidence was estimated at 23.7%, up from 21.1% recorded during the same period in pre-pandemic 2018.

Diokno said the government also wants to trim by 2025 the debt-to-GDP (gross domestic product) ratio to 60%, the internationally accepted threshold, from the 63.5% figure as of end-March this year.

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He likewise reaffirmed the Marcos administration’s goal to achieve upper middle-income status — a target set by the Duterte administration but fell short of hitting.

“That means that we are shooting for a $4,046 per capita income for Filipinos by the end of the President's term,” he added.

The Philippines was on its way to becoming an upper middle-income country in 2019, having posted a gross national income (GNI) per capital income of $3,850 according to the World Bank. Then came the pandemic, effectively plunging the figure to $3,430.

As of 2021, the country’s GNI per capita was at $3,640. The Philippines could earn this status by next year, the National Economic and Development Authority said in May.

"As we move forward with the enduring effects of the pandemic and geo-political conflicts, the government—as always—shall prioritize the welfare of the Filipino people. The overall goals are to create more quality jobs, reduce poverty incidence, and achieve inclusive and resilient growth all through 2022 until 2028," read the DBCC's joint statement.