DBCC adjusts economic strategy for 2024-2028

By Francis Allan L. Angelo

The Philippine government’s Development Budget Coordination Committee (DBCC) has revised its macroeconomic projections and fiscal plans for the years 2024 to 2028 to align with the evolving domestic and international landscape.

Amid challenges including geopolitical tensions and commodity supply tightness, the DBCC aims to maintain inflation within a manageable range of 2.0 to 4.0 percent through 2028.

The DBCC’s continued commitment to the “Reduce Emerging Inflation Now” (REIN) Plan is critical in achieving this target.

Oil prices, a significant factor for the inflation outlook, are projected to range from USD 70 to 90 per barrel in 2024, with a slight decrease in the forecast for subsequent years. The Philippine peso is expected to stabilize against the US dollar, ranging from PHP 55 to PHP 58 through 2028, supported by robust foreign exchange inflows and strong economic fundamentals.

Despite the global economic slowdown, the Philippines closed 2023 with a 5.6 percent GDP growth, outperforming its ASEAN counterparts.

The country’s resilient services sector and robust domestic demand contributed to this achievement. Looking forward, the DBCC has set a GDP growth target of 6.0 to 7.0 percent for 2024, with projections rising to 6.5 to 8.0 percent for the following years.

Government revenues have seen a 7.9 percent increase in 2023, reaching PHP 3.824 trillion, which surpassed targets.

Efforts to enhance tax administration and implement reforms, including taxes on digital service providers and single-use plastics, are part of the strategy to further improve revenue performance. By 2028, revenues are expected to rise to PHP 6.078 trillion.

Expenditures will also increase, with a keen focus on programs that promote social and economic transformation.

The DBCC has emphasized infrastructure through its Build-Better-More Program, aiming for annual spending of at least 5.0 to 6.0 percent of GDP from 2024 to 2028.

The fiscal deficit will be strategically reduced from 5.6 percent of GDP in 2024 to 3.7 percent in 2028.

Borrowing strategies will be adjusted to complement revenue collection enhancements, ultimately allowing Filipinos more financial freedom.

The national debt-to-GDP ratio is expected to decrease from 60.2 percent in 2023 to 55.9 percent in 2028, maintaining the country’s debt within sustainable limits.

The proposed national budget for 2025 is set at PHP 6.200 trillion, up by 7.5 percent from 2024, prioritizing development goals set out in the Philippine Development Plan (PDP) 2023-2028.

As the DBCC aligns its policies to support economic growth and manage fiscal health, the overarching goal remains to mitigate inflation’s effects, foster poverty reduction to a single-digit rate by 2028, and ensure the economy’s resilience against future uncertainties.