DBCC maintains growth targets until 2028 despite external headwinds

ECONOMIC MANAGERS on Thursday despite external headwinds, they maintained their growth targets for this year until 2028.

The Development Budget Coordination Committee (DBCC), which sets official macroeconomic assumptions and FThe ISCAL program maintained its Philippine gross domestic product (GDP) growth target at 6-7% this year, and 6.5-7.5% in 2025.

“Despite external headwinds, we are expected to continue to outperform most emerging economies,” Budget Secretary Amenah F. Pangandaman, head of the DBCC, told the Brie.Fing.

“This robust growth momentum is expected to continue over the medium term, with GDP growth reaching 6.5-8% between 2026 and 2028, taking into account expected domestic and external risks and the Bangko Sentral’s latest monetary and trade assumptions ng Pilipinas (BSP),” she added.

The DBCC also has the Fiscal objectives, which Ms Pangandaman said were “realistic, practical and adaptable to external and domestic developments”.

Economic managers increased the deFICIT-to-GDP ceiling for 2025 to 5.3%, compared to 5.2% previously.

The DBCC retained its deFicit ceilings for 2026 to 2028, but revising the revenue and expenditure programs.

“The new deficit trajectory will decline more realistically and sustainably, from 5.6% of GDP in 2024 to 3.7% of GDP in 2028, enabling sustainable development.efficient fiscalable space for the government to invest in infrastructure development and other growth-enhancing programs and projects,” the DBM chief said.

Revenue targets increased to P4.644 trillion (from P4.583 trillion previously) for 2025; to P5.063 trillion (from P4.957 trillion) by 2026; to P5.627 trillion (from P5.487 trillion) by 2027; and to P6.25 trillion (from P6.078 trillion) by 2028.

“On average, revenues are expected to grow 10.3% each year from 2024 to 2028, reaching $6.25 trillion (16.9% of GDP) by the end of the administration,” Ms. Pangandaman said.

The revised revenue targets will be supported by “enhanced tax administration reforms” and improved collection efficiency, she added.

Deputy Finance Secretary and Chief Economist Domini S. Velasquez said there is no need to introduce new taxes to meet the revised revenue targets.

“For the remainder of the medium term, we actually expect tax revenues to increase… this is largely due to the double-digit increase in the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BoC),” she said.

“We are currently making many improvements in tax efficiency both in the BIR and the BoC. This includes digitalization, regulations to record e-commerce transactions, as well as customs modernization.”

DBCC also expects spending to average around 21% of GDP between 2024 and 2028.

The 2025 spending target was raised to P6.182 trillion (from P6.074 trillion); while 2026 expenditure was set at P6.54 trillion (from P6.433 trillion). Spending for 2027 was increased to P7.027 trillion (from P6.887 trillion), and for 2028 to P7.621 trillion (from P7.45 trillion).

“We will maintain high investment in infrastructure, which will amount to between 5% and 6% of GDP between 2024 and 2028. This is expected to create a multiplierFThis can impact the economy, reduce the cost of doing business, support the creation of quality jobs and ultimately transform the economy,” said Ms Pangandaman.

The DBCC expects the debt ratio to fall from 60.6% this year to 56% in 2028. The threshold considered manageable for developing economies by multilateral lenders is 60%.

Economic managers also expect inflation to stabilize at 3-4% at the end of 2024, returning to the target range of 2-4% between 2025 and 2028.

The exchange rate assumptions have been adjusted this year from P55-P57 per US dollar to P56-P58 per US dollar. The peso is still expected to stabilize at P65-P85 per dollar between 2025 and 2028.

The DBCC has increased its export growth estimate for this year to 5% from 3% previously. The assumption for import growth was lowered from 4% previously to 2%.

It also revised its crude oil price assumptions in Dubai to $70-$85 per barrel this year, compared to $70-%90 per barrel previously. For the period 2025 to 2028, crude oil assumptions in Dubai were kept at $55-58 per barrel. — BMDcruz