DBCC will not revise the target “for the time being,” Balisacan said

By means of Beatriz Marie D. Cruz, News reporter

THE Development Budget Coordination Committee (DBCC) does not plan to revise next year’s growth target “provisionally”, National Economic and Development Cooperation Authority (NEDA) Secretary Arsaid senior M. Balisacan.

“Until we see the numbers for this year, we will not revise the numbers for next year,” he told reporters on the sidelines of the Philippine Economic Brie.Fon Monday.

The DBCC previously adjusted its growth target for 2025 from 6.5-8% to 6.5-7.5%.

Mr. Balisacan said the Philippine central bank’s “less hawkish” tone would impact consumption in the short term, but it would take longer to offinfluence future investments.

Private spending is responsible for almost a quarter of gross domestic product (GDP) growth.

“[Rate cuts] could have immediate consequences, especially for those who intend or plan to purchase consumer durables,” he said.

“But for investments this is possible in the longer termFBecause if interest rates are expected to be lower in the coming months, investors can wait for (the reduction) to materialize, and then it will take some time for those actual investments to happen.”

Last week, the Monetary Board held firm for the fifth time in a row, keeping its key policy rate at a 17-year high of 6.5%. However, the BSP signaled a possible monetary easing in August.

Mr. Balisacan said a rate cut would also improve consumer expectations.

“If people expect interest rates to be lower in the coming months, that will ensure that people are preparing for that investment so that they are ready to go to their bank.”

At the economic brieFTreasury Secretary Ralph G. Recto said the government must increase spending on infrastructure and human capital development programs to boost growth.

“These two areas of investment will deliver the greatest multiplier effect in the short and long term,” he said.

The Philippine economy grew 5.7% in the United States Ffirst quarter despite weak consumption, inFand high interest rates. The DBCC is targeting growth of 6-7% this year.

Mr Recto also mentioned the need to increase investment in education and social services.

“We aim to fully equip Filipinos with new technological knowledge so that we can position ourselves as the hub for technology-driven industries,” he added.

Stronger consumer spending, fueled by remittancesFThe lows and expanding labor market would also boost growth, Mr. Recto said.

The increasing number of Filipinos with formal and stable jobs “strengthens the Philippines’ path to becoming an upper-middle-income country next year,” he added.

The treasury chief cited multilateral lenders’ forecasts that the Philippine economy would outperform its Southeast Asian neighbors.

“By 2033, our economy will nearly triple in size, putting us in the competition with economic giants such as China, Japan, India and South Korea, and we are expected to continue to outpace the growth of Asia’s economic powerhouses in the coming years surpass.” he said.

Meanwhile, Mr. Balisacan said sustainable and inclusive growth would help reduce poverty incidence to 9% by 2028.

“We also need to strengthen our social protection system [for] those who are unable to participate in the labor market due to their personal circumstances, or because they experience certain shocks, such as victims of typhoons or disasters,” he said.

“We need to have a system that prevents them from reaching the poverty line.”

Data from the Philippine Statistics Authority shows that poverty in the Philippines, or the share of poor Filipinos whose per capita income is not sufficientffunable to meet their basic food and non-food needs fell to 22.4% in the US Ffirst half of 2023, compared to 23.7% two years earlier.

This equated to 25.242 million poor Filipinos, down from 26.137 million in the Ffirst half of 2021.