Diokno expects lower-end GDP despite Q3 upswing

MANILA, Philippines — The country’s economic growth is poised to land in the lower range of the government’s year-end target despite an unexpected performance in the third quarter.

Finance Secretary Benjamin Diokno, who leads the government economic team, said the full-year gross domestic product (GDP) is likely to align closely with the lower end of the target set by the Cabinet-level Development Budget Coordination Committee (DBCC), ranging between six and seven percent.

“We have many reasons to believe that we will achieve the lower end of our growth target of six to seven percent for this year, and even faster at 6.5 to eight percent from 2024 to 2028,” Diokno said.

Data showed that the economy must expand by at least 7.2 percent in the fourth quarter to achieve the low end of the target.

This is despite GDP growing faster than expected at 5.9 percent in the third quarter.

Year-to-date, GDP growth stood at 5.5 percent, which is below the full year target.

Nonetheless, this is still faster than some Asian neighbors such as China, Indonesia, Malaysia, Singapore and Vietnam.

“Our consistently strong economic performance is proof that despite a difficult global environment and domestic challenges, the Philippines remains to be one of the brightest spots in the region,” Diokno said.

He further emphasized that the Philippines maintains investor-grade credit ratings amid a sea of downgrades in other economies, including the US.

Just this month, Fitch Ratings affirmed the Philippines’ triple-B rating with a stable outlook.

Similarly, Japanese credit rating agency R&I affirmed the Philippines’ triple-B plus rating and revised its outlook from stable to positive.

Diokno is also relying on ongoing enhancements in revenue collection, which might reach a range of P3.8 trillion to P3.9 trillion for the year.

He said the continued deceleration of inflation would help domestic demand propel the economy.

Latest data showed that inflation dropped to 4.9 percent last month from the 6.1-percent rate in September.

“Still, the government remains vigilant against emerging supply shocks in the market to ensure timely and well-grounded policy recommendations on mitigating inflationary pressures,” Diokno said.

Diokno likewise noted that current labor market conditions are bright and have remained consistently stable. As of August, unemployment rate declined to five percent while underemployment dropped to 10.7 percent.

As the administration gears up for 2024, Diokno maintained that the government is confident and more than ready to take the economy to greater heights.