DBCC cuts 2019 inflation projection to 2.7-3.5%
Credit to Author: ANNA LEAH E. GONZALES| Date: Thu, 18 Jul 2019 16:17:32 +0000
THE inter-agency Development Budget Coordination Committee (DBCC) on Thursday trimmed its inflation forecast for 2019 to between 2.7 percent and 3.5 percent from the earlier 3.0-to-4.0 percent range, but maintained its economic growth projections.
In a briefing after the committee’s 176th meeting in Manila, Janet Abuel, officer-in-charge of the Department of Budget and Management, said the lowered inflation projection was “due to the government’s decisive steps to stabilize the general price level.”
“These include the full implementation of presidential directives issued last year to increase the food supply and the passage of the Rice Liberalization Act, which opened up the rice sector and helped bring rice prices down,” she explained.
Outlook for the rate of the increase in the prices of goods and services for 2020 to 2022 was retained at 2.0 to 4.0 percent.
The DBCC kept its economic growth forecast at 6.0 to 7.0 percent for 2019; 6.5 to 7.5 percent for 2020; and 7.0 to 8.0 percent for 2021 and 2022.
According to Abuel, revenue collections are seen to reach P3.15 trillion this year, which is equivalent to 16.4 percent of the country’s gross domestic product (GDP).
Disbursements are projected to hit P3.77 trillion in 2019, which translates to 19.6 percent of GDP.
For 2020, revenues are expected to increase to P3.54 trillion, equivalent to 16.7 percent of GDP; disbursements, P4.21 trillion, or 19.9 percent of GDP.
Revenue and disbursement projections are estimated to rise to P4.42 trillion and P5.24 trillion, respectively, in 2022.
“The [government’s] Comprehensive Tax Reform Program can help ensure a reliable revenue base and, more importantly, enhance the modernization of our economy,” Abuel said.
“Completing the passage of the remaining tranches of the tax reforms will ensure a steady revenue flow and equitable sharing of contributions for the government’s social and infrastructure programs while securing fiscal stability long into the future,” she added.
Given the revenue and disbursement program adopted, the DBCC maintained the deficit target at 3.2 percent of GDP this year.
For 2020 to 2022, this target was raised to 3.2 percent from 3.0 percent.
Other targets
Assumption for the US dollar price of Dubai crude oil per barrel for 2019 to 2022 is still between $60 and $75 per barrel.
The peso-dollar exchange rate projection, meanwhile, is revised to P51 to P53 against the greenback for 2019 and P51 to 55 versus the US currency for 2020 to 2022.
Growth in the export of goods was projected at 2.0 percent for 2019 — lowered from the earlier 6.0 percent due to slower global growth — and retained at 6.0 percent for 2020 to 2022.
Growth in the import of goods, meanwhile, was forecast at 7.0 percent in 2019, and maintained at 8.0 percent for 2020 to 2022.
Assumption for service-export growth was set at 9.0 percent for 2019 to 2022; and of service-import growth at 3.0 percent for 2019, 4.0 percent for 2020, and 5.0 percent for 2021 and 2022.
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