MACROECONOMIC targets have been revised by the interagency Development Budget Coordination Committee (DBCC) to take into account the impact of the war in the Middle East, a senior planning official said.
The DBCC, which reviews, approves and sets macroeconomic targets, revenue projections, and the national budget ceiling, met last month to consider the latest developments in the Middle East war and its impact on domestic inflation and growth.
Socioeconomic Planning Undersecretary Rosemarie Edillon told The Manila Times that changes had been made, but added that “we can’t disseminate [the numbers] yet because it will be presented to the president tomorrow (today).”
The DBCC in December already lowered its targets after economic growth slumped in the wake of a massive flood control project scandal.
In particular, the growth targets for this year and the next were cut to 5.0-6.0 percent and 5.5-6.5 percent, respectively, from 6.0-7.0 percent. The 2028 projection was kept at 6.0-7.0 percent.
Gross domestic product (GDP) growth slumped to 2.8 percent in the first three months of 2026, well below target, due to the war in the Middle East and the lingering effects of last year’s corruption scandal.
Edillon said risks remained but claimed that “there will be a catch-up during the second half.”
“Actually, starting this month, there will be a catch-up by the agencies. We hope that will increase our outlook,” she added.
Amid expectations of aggressive Bangko Sentral ng Pilipinas (BSP) rate hikes to temper surging inflation, Edillon said they were not worried these would derail growth.
“It’s [rate hike] a very calibrated move by the BSP. So we’re not really very worried,” Edillon said.
The BSP ended an easing cycle and raised its policy rate by a quarter point to 4.5 percent in April. Most economists expect another rate hike this month to tame surging inflation.
Edillon also said that inflation was unlikely to hit double digits despite a possible super El Niño later in the year, citing improved preparedness measures and lessons from past weather disruptions that had kept price pressures contained.
“I think this time we already have more things we can do,” she added.
“Based on our experience, even during the 2016 Super El Niño, inflation did not reach double digits,” she added.
Inflation last reached double digits in September 2008, when it climbed to 10.1 percent.
The rate surged to 7.4 percent in April and economists and the BSP have said that it could have risen further in May due to the continued impact of the Middle East war.
May data will be released this Friday, June 5.