'Too early to change' growth goal – Balisacan

MORE data is needed before any revisions are made to growth and other macroeconomic assumptions, a Cabinet official said on Friday.

"There are many things happening, especially with all the uncertainty in the global economy," Socioeconomic Planning Secretary Arsenio Balisacan told reporters.

"We need to revisit, but we just recently changed the numbers."

Balisacan is a member of the interagency Development Budget Coordination Committee (DBCC), whose primary task is to review and approve macroeconomic targets, revenue projections, borrowing and budget levels, and spending priorities.

After gross domestic product (GDP) growth came in at a below-target 5.6 percent last year, Budget Secretary Amenah Pangandaman — the DBCC chairman — last month said that a review would be made in March.

The interagency body met three times last year: in April, June and December.

The DBCC in December narrowed the 2024 goal to 6.0-6.5 percent from 6.0-7.0 percent. The target for 2025, meanwhile, was expanded to 6.0-8.0 percent from 6.0-7.5 percent and that for 2026-2026 also widened to 6.0-8.0 percent from 6.5-8.0 percent.

Economic managers had held out hope that the bottom end of last year's goal would at least be met despite global headwinds.

For this year, they said that the wider target band reflected "the anticipated impact of structural reforms and evolving domestic and global uncertainties."

Last month, Pangandaman acknowledged the missed GDP goal, but also pointed to improvements in the labor situation. She said that economic managers would also be looking at protectionist policies to be implemented by US President Donald Trump and central bank policy decisions, among other data.

"I think what's crucial is the second-quarter economic performance," Balisacan said on Friday.

Should the DBCC decide to hold off from revising its targets until April-June GDP data is released, this means that changes will only come after Aug. 7 and well after preliminary first quarter results are released on May 8.

It will also come after at least two more Bangko Sentral ng Pilipinas policy meetings, on April 3 and June 19, or even after the one scheduled for Aug. 28.

Monetary authorities had paused from cutting key interest rates further last February, citing stable inflation and "firm" domestic growth prospects while also acknowledging heightened global uncertainties. Some analysts expect rate cuts to resume in April.

"It's too early to change at this point," Balisacan said.

"But we need to be watchful, be flexible because of this uncertainty in the global economy," he added.

The National Economic and Development Authority chief said that while he remained optimistic about GDP growth this year, adjustments would be made "if necessary."

"[L]et's see. I think the key for us is to adjust if necessary, especially since we have a fiscal consolidation program, ensuring that we do not respond in a way that will complicate our policy measures in the future," Balisacan said.

"Our long-term goals for growth, poverty reduction and employment generation should not be compromised," he added.

US protectionism, currently mostly focused on China, Mexico and Canada, could indirectly affect the Philippines, but Balisacan said the country was in a better position compared to its neighbors.

Weaker global growth could hinder a push to expand exports, however, so he said the government was looking at new markets, particularly in the Middle East and India.

"We need to be more aggressive in securing free trade agreements and diversifying our markets," Balisacan said.