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The Development Budget Coordination Committee trimmed its economic growth forecast in 2024 to 6% to 6.5% from 6% to 7%, remaining optimistic despite domestic challenges
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The Philippine economy is expected to bounce back during the last quarter, given the anticipated increase in holiday spending, continued disaster recovery efforts, low inflation, and a robust labor market
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Growth forecast for goods exports was revised downwards to 4% from 5% in 2024 in line with the observed slowdown in export revenues in recent months as well as the revision in the outlook for the domestic semiconductor industry
The Development Budget Coordination Committee (DBCC) has trimmed its economic growth forecast in 2024 to 6% to 6.5% from 6% to 7%, remaining optimistic despite domestic challenges.
In particular, the Philippine economy is expected to bounce back during the last quarter, given the anticipated increase in holiday spending, continued disaster recovery efforts, low inflation, and a robust labor market, according to DBCC’s statement following its latest review of the medium-term macroeconomic assumptions and fiscal program on December 2.
The Philippine economy grew 5.2% in the third quarter of 2024, slower than the adjusted 6.4% growth in the second quarter of the year. It brought the average gross domestic product (GDP) growth for the first three quarters of 2024 to 5.8%, below the government’s target.
READ: PH economy slows to 5.2% in Q3
The growth assumptions for 2025 to 2028, meanwhile, have been given a wider band of 6% to 8% from 6.5% to 8% last June, reflecting the anticipated impact of structural reforms and evolving domestic and global uncertainties.
DBCC also revised downwards its growth forecast for goods exports to 4% from 5% in 2024 in line with the observed slowdown in export revenues in recent months as well as the revision in the outlook for the domestic semiconductor industry.
The growth forecast for goods exports in 2025-2028 is still at 6%.
Growth projection for goods imports in 2024, meanwhile, was maintained at 2%, as year-to-date figures have remained on track and the outlook for domestic consumption remains at current pace. Forecast for 2025 is still at 5% while the 2026 to 2026 target remains at 8%.
The country’s inflation rate for the first 10 months of 2024 remained within target, reaching 3.3%, despite elevated prices globally. Inflation is expected to average at 3.1% to 3.3% for the full year, a revision from the previous forecast of 3% to 4% and significantly lower than the average inflation rate of 6% last year.
For 2025 to 2028, the inflation assumption is maintained at 2% to 4%.
Similarly, the assumptions for Dubai crude oil prices for 2024 were slightly narrowed to $78 to $81 per barrel from $70 to $85 per barrel, reflecting current market developments. For 2025 to 2028, crude oil price assumptions were reduced to $60 to $80 per barrel from $65 to $85 per barrel, with the anticipated improvements in global oil production over the medium term.
The Philippine peso is anticipated to remain stable at an average of P57 to P57.50 against the US$ for 2024, given sustained remittance growth, recovery in travel services, and growing business process outsourcing revenues. It is expected to broadly stabilize at P56 to P58 against the dollar for 2025 and P55 to P58 for 2026 to 2028.
From January to October 2024, revenue collections increased by 16.8% reaching P3.77 trillion, and is expected to increase to P4.383 trillion (16.5% of GDP) by the end of the year.
On average, revenue collections are expected to remain at 16.5% of GDP from 2025 to 2028, reaching P6.250 trillion (17% of GDP) by the end of the current administration.
