DBCC sets more frequent review of macroeconomic assumptions

MANILA, Philippines - The fluidity of global and domestic conditions is proving to be a challenge to both economic managers and monetary officials, forcing them to consider a more frequent review of the country’s macroeconomic targets and assumptions.

Finance Undersecretary Gil Beltran told reporters that the Development Budget Coordination Committee (DBCC) would be reviewing the targets and assumptions every quarter instead of the normal bi-annual review.

Beltran said the last time Philippine economic managers conducted a quarterly review of its macroeconomic assumptions and fiscal goals was in 1998, immediately after the Asian financial crisis.

Monetary officials said they were constrained to do the same thing, with balance of payments estimates constantly changing — making it difficult to pinpoint firm projections.

Deputy central bank governor Diwa Guinigundo said the Bangko Sentral ng Pilipinas (BSP) is constantly monitoring the impact of external and internal developments to determine how these would affect the balance of payments.

The BSP has been unable to make a firm projection for foreign direct investments and portfolio investments precisely because of the constantly shifting situation.

Two weeks ago, the DBCC finally decided to raise the government’s deficit ceiling to P199.2 billion or 2.5 percent of gross domestic product instead of P177.2 billion or 2.2 percent of GDP.

The adjustment followed the decision to scale down the country’s gross domestic product growth target this year to 3.1-4.1 percent from the previous revised range of 3.7 percent to 4.4 percent.