DBCC raises growth forecast for goods exports to 5%

• The Development Budget Coordination Committee has revised upwards its growth forecast for goods exports to 5% from 3% in 2024

• This is due to the “better-than- expected outturn in the first quarter and an improved outlook for the global semiconductor market

• Growth projections for goods imports, on the other hand, were revised downwards to 2% from 4% in 2024 and 5% from 7% in 2025

• The DBCC maintained the 6% to 7% growth forecast for the Philippine economy in 2024 despite external headwinds

The Development Budget Coordination Committee (DBCC) has revised upwards its growth forecast for goods exports to 5% from 3% in 2024.

DBCC said the upward revision is due to the “better-than- expected outturn in the first quarter and an improved outlook for the global semiconductor market.”

Goods exports are expected to continue growing to 6% in 2025 to 2028, DBCC said in a statement following its latest review of the medium-term macroeconomic assumptions and fiscal program.

Growth projections for goods imports, on the other hand, were revised downwards to 2% from 4% in 2024 and 5% from 7% in 2025 “amid moderation in international commodity prices alongside the impact of tight monetary policy tempering consumption and investment activity.”

For 2026 to 2028, goods imports are still expected to grow by 8% supported by sustained infrastructure investments.

The DBCC also maintained the 6% to 7% growth forecast for the Philippine economy in 2024 despite external headwinds. The economy is still seen to expand further to 6.5 to 7.5% in 2025, roughly consistent with the average growth forecasts of multilateral organizations.

READ: PH growth targets for 2024, 2025 downgraded

The growth momentum is expected to continue over the medium term, with gross domestic product (GDP) growth reaching 6.5% to 8% from 2026 to 2028 while considering anticipated domestic and external risks and the latest monetary and trade assumptions of the Bangko Sentral ng Pilipinas.

DBCC said this growth trajectory “puts us firmly on the path to becoming an upper- middle-income economy in less than two years and reducing the poverty rate to single-digit levels by 2028.”

The country’s inflation rate reached 3.9 percent in May and is expected to settle between 3% to 4% by the end of this year, a little higher than the previous forecast of 2% to 4%. DBCC aims to achieve price stability and return to the target range of 2% to 4% from 2025 to 2028 through the proactive implementation of monetary policy measures and well-targeted government interventions that address the primary drivers of inflation.

The peso-dollar exchange rate assumption for 2024 was revised to P56 to P58 against the $1 from P55 to P57 previously. This is expected to broadly stabilize at P55 to P58 for the remainder of the medium term, given increasing tourism receipts, growing business process outsourcing revenues, and robust overseas Filipinos remittances that will support and keep the currency stable and resilient against persistent global headwinds.

From January to May 2024, revenue collections reached P1.853 trillion, increasing by 16.3% year-on- year.

On average, revenues are expected to grow by 10.3% every year from 2024 to 2028, reaching P6.250 trillion (16.9% of GDP) by 2028. For 2024, the DBCC has maintained revenue growth target to P4.27 trillion.

The proposed national budget for 2025 is set at P6.352 trillion, equivalent to 22% of GDP and is 10.1% higher than the P5.768 trillion budget for 2024. This is higher than the P6.2 trillion proposal during the DBCC review in April 2024.