Government slightly cuts 2016 GDP growth target to 6.8-7.8%

MANILA — External risks coming from a slowing Chinese economy and cheaper oil led the government to slightly cut the economic growth target for this 2016 to 6.8-7.8 percent from 7-8 percent previously.

After the Cabinet-level, interagency Development Budget Coordination Committee (DBCC), National Economic and Development Authority (NEDA) Assistant Director-General Rosemarie G. Edillon told a press conference that the target average growth range for the period 2016 to 2019 remain 7-8 percent, although specific annual targets varied.

For 2017, the gross domestic product (GDP) has been projected to grow by 6.6-7.6 percent; for 2018, 7-8 percent; and for 2019, 6.9-7.9 percent, Edillon said.

The NEDA official said external developments were the primary reason for the slight downgrade in the growth goal for this year, especially the slowdown in China and the downward spiralling oil prices.

The government also cut its exports and imports growth targets to 5 percent (from 6 percent previously) and 10 percent (from 12 percent), respectively, based on the Bangko Sentral ng Pilipinas’ Balance of Payments and International Investment Position Manual or BPM6 projection.

As for domestic risks to economic expansion, Edillon cited climatic challenges, such as the prolonged dry spell due to El Niño, although she noted that it was already being addressed since the latter part of 2015.

Despite external challenges, the economy continues to be more driven by domestic demand, according to Budget Secretary Florencio B. Abad.

Edillon noted that domestic demand grew 8 percent in 2015, pushing the GDP to expand by 5.8 percent even as net exports pulled down economic output below the official 7-8 percent target as well as the “realistic” projection of 6-6.5 percent.  SFM