THE economy needs to grow by at least 9% to 9.5% a year until 2028 to return to its pre-pandemic growth track, a former Bangko Sentral ng Pilipinas (BSP) official said.
During the MAP Economic Briefing and General Membership Meeting, GlobalSource Partners analyst Diwa C. Guinigundo said that the current government’s target of “between 6% to 8% annually, by 2036 (the Philippines) should be reaching only P60 trillion.”
“To overcome this setback, growth will have to be between 9% to 9.5% through 2028 to be able to return to the original growth path,” he said.
Last year, Mr. Guinigundo pushed for targets of 9.4% growth.
The Development Budget Coordination Committee (DBCC) on December trimmed the economic growth estimate for this year to 6-6.5% but widened the target band to 6-8% until 2028, due to “evolving domestic and global uncertainties.”
Finance Secretary Ralph G. Recto described as “doable” growth of between 6% and 6.5%.
In 2024, the economy expanded by 5.6%, following a 5.5% reading in 2023. It fell short of the government’s revised 6-6.5% target.
“We grew by only 5.5% in 2023 and 5.6% last year. Of course, we take pride in saying Philippine growth performance surpassed the global average in 2022 and 2023 of 3.5% and 3.3% respectively,” he said.
“But we had the economy stall in 2020 and the years following that, so we have a lot of catching up to do.”
Mr. Guinigundo said risks to the economy include fiscal and debt sustainability, with revenue effort remaining low, food security issues, and political disunity.
“Since the Trump policy of tariff increases and tax cuts are potentially inflationary, we don’t expect the Fed to be very aggressive in reducing the target interest rate,” he added in his presentation.
“With the BSP having the space to further ease monetary policy, we see a potential capital outflow, peso depreciation, and therefore, the resurgence of inflation.”
Mr. Guinigundo noted that the budget deficit, which narrowed to P1.506 trillion in 2024, remains in the “trillion mark.”
He said improved tax administration can only yield much, as can “squeezing” state-run firms for more dividends.
“This is after Congress forced the split banks and other GOCCs to continue to the Maharlika Investment Fund. No wonder, from the pre-pandemic (debt) of $7.7 trillion, we saw the crisis ending at $16 trillion. In January 2025, $300 billion was added to National Government debt,” he said. — Aubrey Rose A. Inosante