THE Development Budget Coordination Committee (DBCC) may revise macroeconomic projections once again, after latest data showed the economy is recovering slower than expected.
“The DBCC will be meeting immediately to reassess the latest numbers to see if there is a need to adjust the full-year projections,” Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said in a media briefing Tuesday.
Gross domestic product (GDP) slumped by 11.5% in the third quarter, after a 16.9% contraction in the second quarter pushed the country into its first recession in nearly three decades.
In its July 28 meeting, the DBCC projected GDP will shrink by 4.5-6.6% this year, before growing by 6.5-7.5% in 2021 and 2022.
Mr. Chua said GDP is expected to improve in the fourth quarter, as lockdown restrictions have been further loosened to boost economic activity.
“Given the policy changes and the further opening up of the economy and the policy not to revert to more stringent lockdown, I think the trend really is a further improvement in the fourth quarter, and hopefully we will begin to see better figures, or positive year-on-year quarterly growth starting early next year,” Mr. Chua said.
“The programs that we have laid out, the 2021 budget, the CREATE (Corporate Recovery and Tax Incentives for Enterprises) bill, the FIST (Financial Institutions Strategic Transfer) and the GUIDE (Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery) bills are all important elements in ensuring that we accelerate the recovery, alongside our risk management strategy,” he added.
The DBCC has yet to schedule an exact date of the upcoming meeting, said Budget Assistant Secretary Rolando U. Toledo in a Viber message.
Mr. Chua said the DBCC will also review projections on poverty and unemployment rates. The government earlier estimated that the poverty rate may rise to 16%-17.5% (from 16.7% in 2018), and unemployment rate to average 11% by end-2020.
By 2022, the government targets to bring down the poverty rate to below 14% and the jobless rate to 3-5%, as the economy is expected to grow by an annual rate of over 6%.
Also, Mr. Chua said the DBCC will assess the current fiscal program of the government.
Latest data available showed the government expects the budget deficit to hit 9.6% of GDP this year, before narrowing to 8.5% in 2021 and 7.2% in 2022.
For next year, Mr. Chua said the accelerated implementation of the “Build, Build, Build” infrastructure program, seen to generate 1.7 million jobs, and the timely passage of the P4.5-trillion budget will be crucial for a stronger recovery.
“A delay in passage of the budget will be detrimental to our recovery. Each day of delay will result in P1.1 billion not spent,” he said. — Beatrice M. Laforga