Peso weakness, Trump win
MANILA, Philippines — The government is poised to revisit its macroeconomic assumptions for the medium-term in light of the global economic impact of Donald Trump’s re-election as US president and the peso’s depreciation against the dollar.
Budget Secretary and Development Budget Coordination Committee chair Amenah Pangandaman said the DBCC is set to convene in the first week of December to discuss possible revisions to growth, inflation and foreign exchange assumptions.
“I don’t have numbers now. The technical working group is working on it,” Pangandaman said when asked about the extent of potential adjustments. “Most likely, (there will be revisions), but if ever, (it will be) very minimal.”
She said the DBCC would likely factor the impact of Trump’s administration on the global and local economy into the government’s macroeconomic projections.
Pangandaman also acknowledged the peso’s weakness, which recently hit the 59-to-$1 mark as a key factor to review. “Especially that, most likely (we’ll look into it),” she said, adding that the central bank is in charge of assessing exchange rate trends.
The Cabinet-level DBCC periodically holds special meetings to review its macroeconomic targets. It last convened in June where the economic team retained its six to seven percent growth target this year.
Pangandaman remains optimistic that the Philippines will be able to hit its growth target this year despite the slower economic expansion in the third quarter.
She said government agencies have been efficiently utilizing their budgets, driving the progress of ongoing infrastructure and social programs, which are key contributors to economic growth.
The Philippine economy grew by only 5.2 percent in the third quarter, slower than the 6.4 percent in the previous quarter and six percent a year ago. From January to September, growth averaged 5.8 percent.
The Budget secretary also assured the public that the government has enough buffer in its budget to meet dollar-denominated obligations despite peso depreciation, with most contracts already signed and projects nearing completion. “We have elbow room in the budget,” she said.
There are also no current plans to adjust the needed borrowings for the medium-term. “I think there are no plans (to adjust borrowings). We’ll see everything in the first week of December,” she said.
The government is also preparing for a series of international economic roadshows next year to attract foreign investment and promote the Create More law to key partners like the US, Japan, Korea and the Middle East.
“Hopefully (we can do roadshows) next year. We’re not that busy, so we have a chance to go out and promote Create More,” she said.
Pangandaman said the government is finalizing the implementing rules and regulations for the Create More Act and the Government Procurement Act.
“By next year, hopefully, the agencies will be able to use their budgets more efficiently, with greater transparency and at a faster pace,” she said.