THE government’s medium-term growth target remains achievable amid efforts to control inflation and build much-needed infrastructure, Socioeconomic Planning Secretary Arsenio Balisacan said.
“I think with the target to move inflation to the 2 to 4 percent range and with the… ramping up of the infrastructure program including housing… by our estimate that would add about 1 percentage point of GDP (gross domestic product),” Balisacan said during the Philippine Economic Briefing in San Francisco on Thursday.
“If we can get that rolling next year, I think the 6.5 to 8.0 percent growth for the medium term is very much within the possibilities,” he added.
This year’s 6.0- to 7.0-percent goal also remains achievable, Baliscacan said, following the third quarter’s better-than-expected 5.9-percent result.
While many analysts have said that the goal appears to be out of reach as fourth-quarter growth would have hit at least 7.2 percent, he said that this was still doable.
“There’s still much space for the acceleration of government spending which hounded the performance in the first half of the year, there’s still much space there,” Balisacan said.
He pointed out that inflation was likely to continue moderating in the coming months, which would help spur spending and boost the economy.
“With nearly two-thirds of the economy dependent on domestic consumption, we can imagine the impact of inflation on the economy, and so with the moderation in the last quarter and the last quarter also comes with all these inflows associated with [the] holidays,” he said.
For his part, Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr. said the central bank was within striking distance of lowering inflation to between 2.0 and 4.0 percent.
Inflation could top the target next year but “for the most of the year we should be between 2 and 4 percent,” he said during the briefing.
Key interest rates have been raised by a cumulative 450 basis points (bps) since May of last year to temper inflation, which hit a 14-year high of 8.7 percent in January 2023.
The BSP’s policy rate currently stands at 6.50 percent, the highest since 2007, following an unscheduled 25-bps hike last month.
Monetary authorities decided to keep interest rates unchanged on Thursday but warned that further tightening could be ordered to keep inflation expectations in check.