The Philippine government lowered economic growth targets for this year, joining Asian nations in bracing for mounting global risks that’s damping demand for the region’s exports.
The economy will probably expand 6.8 percent to 7.8 percent this year, compared with a previous goal of as much as 8 percent, the inter-agency Development Budget Coordination Committee said late Monday. Growth is seen at 6.6 percent to 7.6 percent in 2017, committee members said in a briefing in Manila.
Asian stocks fluctuated Tuesday, underscoring greater volatility in financial and commodity markets that’s hurting growth prospects in Asia. In the Philippines, outgoing President Benigno Aquino is boosting spending to a record to help shield the domestic economy, building on momentum after growth quickened to a one-year high last quarter.
“The Philippines isn’t immune to these headwinds,” Euben Paracuelles, an economist at Nomura Holdings Inc. in Singapore, said by phone. “But even with the revisions, the government is still targeting faster growth this year from last year which signals that domestic demand remains robust, offsetting the weakness from the exports sector.”
The government cut its estimate for exports growth this year to 5 percent from 6 percent, while also lowering the forecast for imports growth to 10 percent from 12 percent. Inflation will probably average near the low-end of the 2 percent to 4 percent target this year, before accelerating to the midpoint of the range in 2017, it said.
Revised economic targets were based on a lower exchange-rate assumption of 45 to 48 pesos per dollar from 43 to 46 previously, and an estimate for Dubai crude oil of as low as $45 a barrel.