Statement on the 16th Full Cabinet Meeting
Arsenio M. Balisacan, PhD
Secretary
National Economic and Development Authority
Malacañang Press Conference
4 April 2024
Malacañang Press Briefer Daphne Oseña-Paez,
Members of the Malacañang Press Corps,
Ladies and gentlemen,
Good morning!
Yesterday, President Ferdinand R. Marcos, Jr. convened the 16th Full Cabinet Meeting to discuss, among others, the economy’s outlook and policy initiatives in the medium term.
The President and the Cabinet confirmed the macroeconomic targets approved by the Development Budget Coordination Committee or DBCC during its 187th meeting last March 22, 2024. The revised targets for our headline indicators considered the country’s recent economic performance in FY 2023 and reflect the latest developments and expectations on external factors such as global demand and trade growth, oil price movements, and expected exchange rate and inflation trends.
Medium-Term Growth Targets
The DBCC revised the Gross Domestic Product or GDP growth target for 2024 to 6.0-7.0 percent from 6.5-7.5 percent. The DBCC also revised the growth target for 2025 to 6.5-7.5 percent from 6.5-8.0 percent and retained the target of 6.5-8.0 percent for 2026 to 2028.
Robust macroeconomic fundamentals will support this growth trajectory. These growth targets will sustain the country’s position as one of the fastest-growing emerging economies in the Asia Pacific region.
Moreover, at this pace of growth, we are still on track to reducing poverty incidence from 18.1 % in 2021 to single-digit level in 2028.
Inflation Outlook
The target range for inflation is retained at 2.0-4.0 percent for 2024 through 2028, following the government’s assessment of recent internal and external developments that impact the prices of major commodity groups. The inflation outlook considers the monetary policy actions the Bangko Sentral ng Pilipinas is undertaking and the non-monetary strategies and measures the government is implementing.
Medium-Term Fiscal Program or MTFP
The updated Medium-Term Fiscal Program, or MTFP, provides a more gradual but practical fiscal trajectory for the next few years.
The government will further improve its performance through enhanced tax administration reforms focused on modernizing and enhancing the efficiency of the Philippine tax system. We will complement these measures by working with Congress to pass priority tax reform measures to recalibrate and further improve revenue mobilization and ultimately be more attuned to the country’s fiscal requirements and current domestic developments.
With these expected reforms, we project revenues to reach Php 4.270 trillion (16.1 percent of GDP) in 2024 and rise to Php 6.078 trillion (16.4 percent of GDP) by 2028.
We project Deficit-to-GDP to fall from 5.6% in 2024 to 3.7% by 2028, leading to an expected debt-to-GDP ratio of 60.3 percent in 2024 and 55.9 percent by 2028. Meanwhile, the government’s disbursement program shall remain at about 20 percent of GDP or an expected PHP 5.75 trillion in 2024 and PHP 7.45 trillion by 2028.
FY 2025 Budget
The DBCC proposes a national budget of PHP 6.2 trillion for FY 2025, with spending to remain focused on delivering high-impact and transformative public infrastructure projects and essential social services, especially for the poor and vulnerable. The budget shall support the Marcos Administration’s Build-Better-More Program to stay on course and maintain infrastructure spending between 5 to 6 percent of GDP from 2024 through 2028.
Opportunities and Risks to Growth Outlook
Meanwhile, the Economic Team identifies the following opportunities and risks.
First, we continue to recognize and promote the crucial role of private-sector investments in delivering public infrastructure and services, thereby alleviating the burden on the government’s limited fiscal space. The full implementation of economic liberalization, investment-related, and business-friendly reforms and initiatives, including the recently enacted Public-Private Partnership or PPP Code and its accompanying Implementing Rules and Regulations, will pave the way for greater investor interest and activity in the Philippines. We also expect the President’s aggressive investment and trade promotion initiatives to continue to bear fruits as more and more recognize the country’s promise as a destination of choice for businesses.
We anticipate that the Pambansang Pabahay Para sa Pilipino or 4PH Program will boost our mining and manufacturing sectors, as we expect the demand for construction materials to increase. We also expect the availability of more affordable housing units under the 4PH Program to stimulate the real estate sector, contributing to creating dynamic and livable communities. Also, our higher growth forecast for the transport and digital sectors can be attributed to the foreseen impact of the Public Service Act on critical digital and physical connectivity infrastructure in the years to come.
However, we also identify domestic and external risks on the horizon. Climate change and extreme natural disasters, such as El Niño, will continue to pose risks to food security and the stability of food prices. Additionally, risks related to inflation, such as potential adjustments in transport fares, wages, and service utility fees higher than expected, could dampen household consumption.
On the external front, the global economic slowdown may weaken external demand, while increasing geopolitical and trade tensions could disrupt supply chains. Furthermore, general elections in major economies could lead to political shifts that may disrupt trade and investment.
For 2024, the Economic Team will strongly advocate for the enactment of much-needed next-generation reforms to further enable the transformation of our economy and ensure sustained and inclusive growth. We are working hard with our partners in Congress to pass game-changing laws across various sectors, and we seek to make good on our promise of delivering on the Executive and Legislative’s Common Legislative Agenda.
Conclusion
In conclusion, the Marcos Administration remains steadfast in its commitment to sustaining the robust growth trajectory of the Philippine economy. The government’s dedication transcends meeting statistical targets or numerical benchmarks; we direct our efforts toward realizing a strategic and compelling vision for our nation’s prosperity even as we navigate a global economic landscape marked by various challenges within and without.
Despite the anticipated risks, we remain optimistic about the country’s sustained growth momentum as we strive for better development outcomes. We aspire to position the Philippines as a frontrunner within our region and beyond—a beacon of inclusive progress and resilience.
Therefore, let us forge ahead with purpose and pave the way for the realization of our country’s AmBisyon of a matatag, maginhawa, at panatag na buhay para sa lahat.
Thank you.
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