Recto hints at cutting PH’s economic growth targets

The Marcos administration’s economic managers are likely to trim their economic growth targets for this year all the way to 2028.

At the sidelines of the Economic Journalists Association of the Philippines (EJAP) 2024 Board of Directors’ induction late Thursday evening, Finance Secretary Ralph Recto told reporters that the Development Budget Coordination Committee (DBCC) will be having a meeting on Friday, March 22, 2024.

The DBCC is an interagency body composed of the chiefs of Budget and Management, Finance, and Socioeconomic Planning tasked to review and approve macroeconomic targets, revenue projects, borrowing levels, and budget and expenditure ceilings.

“I think we should come out with something more realistic [target] not only this year but for the medium-term until 2028,” Recto said.

In its December 2023 meeting, the DBCC set a target of 6.5% to 7.5% gross domestic product (GDP) growth target for 2024, while for 2025 to 2028 the goal was set at 6.5% to 8%. 

“If we project a very high GDP then you are projecting a very high revenue and if you miss it, your deficit will increase and then your debt-to-GDP [ratio] will also increase,” Recto said.

“I think we should be responsible for that. But, nevertheless, we pushed the BIR [Bureau of Internal Revenue], the Customs, and the Treasury to collect more so there must be some efficiency,” the Finance chief added.

The Philippine economy as measured by GDP —the total value of goods and services produced in a period— grew by 5.6% in 2023, falling short of the government’s target band as elevated interest rates resulting from high inflation environment dampened consumption. 

“So that’s what we will do. We will adjust the GDP [target] downward but we will ask the BIR and BOC to do more,” Recto said.

As to the maximum 7.5% GDP growth target for 2024, the Marcos administration’s chief economic manager noted that “I think that aspiration is too high.”

Nonetheless, Recto said that the government’s growth targets should be “more realistic, tempered… but also aspirational.” —VAL, GMA Integrated News