The skyline of Parañaque City is seen during sunset, March 7, 2024. — RUSSELL PALMA, THE PHILIPPINE STAR

THE DEVELOPMENT Budget Coordination Committee (DBCC) has a “good case” for revisiting its growth targets for this year amid a weaker global economic outlook, National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan said on Tuesday. 

“When we were preparing our assumptions, forecast and growth programs in the last quarter of last year, we were working on the assumption that the global economy would recover from its downturn in 2023. Now, IMF (International Monetary Fund) and many other organizations are saying that it’s likely to continue to slow down further,” he told a media briefing in Pasig City.

Last December, the DBCC narrowed its gross domestic product (GDP) growth target to 6.5-7.5% from 6.5-8% previously. The Philippine economy grew by 5.6% in 2023, falling short of the DBCC’s 6-7% goal for the year and slower than the 7.6% expansion in 2022.

But since the start of 2024, Mr. Balisacan said the global economy has not been growing as much as earlier expected. According to the IMF, global growth is projected at 3.1% this year, but risks remain.

“In other words, it’s less robust. It’s more anemic the global growth than was initially expected,” he said.

The NEDA chief said the Philippine economy is also facing challenges from the El Niño weather phenomenon, inflation and high interest rates.

The El Niño phenomenon has been affecting agricultural production, with the weather bureau expecting it to last until the second quarter of the year.

Last month, the Philippine central bank kept the key rate at 6.5% — the highest in nearly 17 years — for a third straight meeting. The Bangko Sentral ng Pilipinas (BSP) has raised policy rates by 450 basis points (bps) from May 2022 to October 2023 to tame inflation.

For the first two months of 2024, headline inflation averaged 3.1%. The BSP expects inflation to average 3.6% this year.

Mr. Balisacan said there is a “good case” for revisiting the macroeconomic assumptions and targets, but they would still have to wait for the release of the first-quarter GDP data on May 9.

“But even if we set it from the range of 6.5-7.5%, to say 6-7%, that’s still to us, a good range. I think for this year, I’m okay with the 6-7% [target], it’s very much achievable,” he said.

Last month, Finance Secretary Ralph G. Recto said the government might have to adjust its fiscal targets for the year to be “more realistic.”

Most multilateral institutions’ Philippine growth forecasts do not meet the lower end of the DBCC’s target range for 2024, including the World Bank (5.8%), the International Monetary Fund (6%) and the Asian Development Bank (6.2%). — B.M.D. Cruz