Marcos Team Lowers Philippine GDP Growth Range for 2022

Siegfrid Alegado and Andreo Calonzo, Bloomberg News

Carbon Market in Cebu City, the Philippines, on Saturday, May 7, 2022. The Philippines peso is in danger of extending this year's decline as uncertainty over the policies of the front-runner in Monday's presidential election adds to economic headwinds. Photographer: Veejay Villafranca/Bloomberg , Bloomberg

(Bloomberg) -- The Philippine economy will likely expand at a lower band than previously estimated, Finance Secretary Benjamin Diokno said, as the new administration faces a raft of challenges.

Gross domestic product is seen expanding by 6.5%-7.5% this year, Diokno said in a televised briefing Wednesday. Previous officials had forecast output to grow within a 7%-8% range this year, and an inter-agency budget committee is set to review economic assumptions on Friday.

The Philippines faces quickening inflation, government debt bloated by pandemic-era spending and a worsening global outlook, threatening to damp economic growth prospects at the start of President Ferdinand Marcos Jr.’s six-year term.

The finance chief also said Wednesday:

Consumer price gains will remain elevated in the coming months
The government aims to lower the ratio of budget deficit to output to 3% starting 2026
Debt-to-GDP ratio will be lowered to 60% by 2025

“We want to show the world that we’re conscious of having sound fiscal management,” said Diokno, who’s widely considered the de facto head of Marcos’s economic team. While there’s still space for state spending, Diokno said officials will consider taxes including on digital services.