Economic growth momentum to be sustained despite global headwinds

MANILA, Philippines — The National Economic and Development Authority (NEDA) is confident that the government remains on track to achieving its medium and long-term economic goals as it proactively addresses global inflationary pressures that pose risks to the country’s growth and recovery.

Socioeconomic Planning Secretary Arsenio Balisacan said that the government stands ready to manage these risks through the Medium-Term Fiscal Program and the upcoming Philippine Development Plan (PDP) 2023-2028, which will contain targets and strategic actions of government agencies in the next six years.

“We have developed a program of interventions, including critical policy and legislative priorities, to address the economy’s short-term and medium-term issues in the next six years. The PDP’s targeted completion before the end of the year assures us that we will have a robust roadmap for navigating short-term challenges and uncertainties. At the same time, we are laying the groundwork for faster, more inclusive growth that generates high-quality employment to reduce poverty rapidly,” Balisacan said.

Balisacan highlighted the current challenges faced by many economies worldwide, including the effects of the Russia-Ukraine conflict and the natural calamities that dampened agricultural production in many countries.

These have driven rapid price increases in food, transportation, and energy, making inflation persistently high globally.

“The Philippines and our Asian neighbors are not spared from these trends – major economies in the ASEAN, such as Thailand, Singapore, Indonesia, and Malaysia, have seen their inflation rates accelerate in the past year,” Balisacan added.

Based on NEDA’s analysis, sustained increases in inflation in 2022 and 2023 would cause a slowdown in the country’s economic growth.

The gross domestic product (GDP) growth for next year, is now expected to be lower by 0.6 percent than what was originally projected.

“While we expect our poverty situation to improve as we continue our recovery, inflation and rising interest rates will dampen this improvement. The Marcos Administration is indeed mindful of these challenges. We are particularly concerned about higher inflation,” Balisacan said.

To address inflation, the NEDA chief reiterated the PDP’s focus on tackling constraints affecting prices of basic necessities. He also adds that the plan includes measures targeted to assist vulnerable Filipino families who are still recovering from the scarring of the COVID-19 pandemic.

“In particular, the PDP contains strategic actions to quickly address constraints in our food, energy, and transportation systems. These actions will mitigate inflationary pressures, protect the poor and most vulnerable in society through targeted assistance, and manage the socioeconomic scarring, especially for students and MSMEs, to hasten our recovery,” Balisacan added.

Balisacan assured the public that the government remains steadfast in monitoring global developments to remain on track towards its short and medium-term goals.

“As we seek solutions for short-term challenges, we are very careful to not compromise our medium-term goals, which is to put the economy to a higher growth trajectory, so that we can achieve more high-quality jobs and reduce poverty rapidly,” Balisacan said.