Marcos to submit P5.268-T national budget for 2023 on Monday

Willard Cheng, ABS-CBN News

Posted at Aug 17 2022 03:58 PM

MANILA — President Ferdinand Marcos Jr. will submit the proposed P5.268-trillion national budget for 2023 to Congress on Monday, August 22.

Budget Secretary Amenah Pangandaman said the budget is geared toward economic transformation for inclusivity and sustainability, aimed at creating more quality and green jobs, reducing poverty incidence, promoting digitalization, and achieving an inclusive and resilient economy.

For his part, Finance Secretary Benjamin Diokno said revenues are picking up due to the reopening of the economy, and this will help them fund the spending plan. 

"Our revenues are on the rise, reflecting improvements in the labor market driven by robust economic activity. For the first half of 2022, total revenue collection reached P1.7 trillion, 16 percent higher than the same period in 2021. This year, we expect revenue collection to already exceed its pre-pandemic level," Diokno said.

Finance Undersecretary Zeno Abenoja also noted that any budget shortfall will be funded through borrowings, but these will be from domestic sources to limit any foreign exchange risk.

BSP BARES MONETARY POLICY PLANS

Meanwhile, Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla discussed monetary policy plans amid expectations of further tightening by the US Federal Reserve. 

The BSP earlier hiked interest rates this year as part of its plan to anchor inflation expectations. 

The rates were also in response to a widening differential between US interest rates as its Federal Reserve System has also been hiking aggressively to address US inflation. 

The differential has led to some capital outflows from Philippine markets and a weakening of the Philippine peso against the US dollar. 

"The US is far from hitting its inflation goal. The Fed won't be as aggressive as before, but you cannot rule out 50bps adjustments," Medalla said.

The Philippine Central Bank will have another Monetary Policy rate setting meeting Thursday, August 18. 

"Not zero, not 75, right? It is probably more than a coin toss. I will not say which side of the coin is heavier. As to whether there will be more rate hikes in the remaining meetings, we will not rule them out. As you know, we want the midpoint of the forecast for next year to be below 4, and for the midpoint of the forecast for 2024 to be as close to 3 as possible. Exactly how many rate hikes that will require is hard to forecast because a lot of the things that drive inflation may subside," the BSP governor added.

Bank of the Philippine Islands lead economist Jun Neri said he is seeing the dollar-peso exchange rate hitting P55.40 by the end of the year, as the BSP steps up its own hike increases over the next 2 quarters. 

He added that more dollar inflows will also help support the exchange rate in the fourth quarter.

Security Bank treasurer Andre Ibarra, meanwhile, sees the exchange rate hitting P56 to P56.25 by the end of 2022.

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