DBCC sees higher revenues in 2022; raises inflation outlook

ABS-CBN News

Posted at Dec 05 2022 03:32 PM

MANILA - Annual revenues could hit P3.5 trillion for 2022, following the strong collections from January to October, the Development Budget Coordination Committee said on Monday.

Higher government revenues were attributed to improved tax collection and digitalization efforts of collection agencies, the DBCC said in a statement. 

Revenue collection meanwhile, is seen to reach P3.7 trillion for 2023, and up to P6.6 trillion in 2028, the DBCC said. 

Gross domestic product growth could hit the 6.5 percent to 7.5 percent target this year, the agency said. However, growth is likely to decelerate in 2023 to between 6 to 7 percent due to external headwinds such as the slowdown in major economies, it added.

"Recognizing both opportunities and challenges, the DBCC stands united and believes that the Philippine economy can grow further at a robust pace by putting the right policies and spending priorities in place," the DBCC said.

For 2024 to 2028, growth may pick up and settle between 6.5 to 8 percent, the DBCC said. With a higher growth trajectory in the next 6 years, poverty is also expected to "gradually improve" to 9 percent by 2028, it added.

The DBCC, meanwhile, increased its inflation rate assumption for 2022 to 5.8 percent from the 4.5 to 5.5 percent range "given the persisting high prices of food and transport costs."

It is seen to moderate to 2.4 to 4.5 percent by 2023 before easing back within the target range of 2 to 4 percent by 2024 until 2028, the agency said.

Inflation rose to 7.7 percent in October, near a 14-year high. It is seen to further accelerate to up to 8.2 percent in November, according to the central bank. 

The Philippine peso is also expected to continue to depreciate against the US dollar due to "heightened global uncertainties and aggressive monetary policy tightening of the US Federal Reserve." 

A seasonal increase in remittances from overseas Filipinos saw the peso recently regain strength, closing at P55.74 to the dollar on Friday after plunging to as low as P59 to the greenback in early October. 

Disbursement for the year may hit P5 trillion or 23 percent of GDP, which led to the revised deficit projection of 6.9 percent of GDP for 2022.

Target deficit for 2023 to 2028 was maintained, which it said may progressively decline from 6.1 percent of GDP in 2023 to pre-pandemic level of 3 percent of GDP in 2028.

"As we move forward amid the sharp increase in inflation this year, the government commits to take actions that will mitigate the lingering effects of the COVID-19 pandemic and impact of political tensions," the DBCC said.

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