Govt cuts targets amid uncertainties

ECONOMIC managers on Thursday announced changes to the country’s medium-term macroeconomic assumptions and fiscal program after considering domestic and global developments.

The gross domestic product (GDP) growth target for this year was slashed to 5.5-6.5 percent while that for next year to 2028 was narrowed to 6.0-7.0 percent from the 6.0-8.0 percent previously set in December last year.

“The revisions take into account heightened global uncertainties, such as the unforeseen escalation of tensions in the Middle East and the imposition of US tariffs,” Development Budget Coordination Committee (DBCC) Chairman and Budget Secretary Amenah Pangandaman said during a press briefing.

“Despite these headwinds, the DBCC remains vigilant and ready to deploy timely and targeted measures to mitigate their potential impact on the Philippine economy,” she added.

The inflation outlook was narrowed to 2.0 to 3.0 percent for this year from 2.0-4.0 percent, but is still expected to hit 2.0-4.0 percent yearly from 2026 to 2028.

Pangandaman said the government was focused on “maintaining price stability while expanding trade partnerships and enhancing the productivity of domestic industries.”

The peso is now expected to average P56 to P58 to the dollar this year until 2028, from P56-58 for 2025 and P55-58 for 2026-2028. Economic managers said the exchange rate would be supported by lower domestic inflation, but added that it would also continue to be shaped by global financial conditions and external trade.

Trade outlook

The economic managers also revised its trade assumptions amid global market developments. Exports are now projected to contract by 2.0 percent this year due to “slower global demand and heightened trade policy uncertainties” instead of expanding by 6.0 percent

The growth assumption or 2026-2028, meanwhile, was lowered to 2.0 percent from 6.0 percent.

As for imports growth, the outlooks for 2025 and the next three years were trimmed to 3.5 percent and 4.0 percent, respectively, from 5.0 and 8.0 percent.

As for oil prices, the assumptions for crude were reduced to $60-70 per barrel for this year until 2028 from $60-80.

Fiscal program

Revenue assumptions were all trimmed to P4.520 trillion, P4.983 trillion, P5.366 trillion and P5.914 trillion for this year until 2028 from the previous P4.644 trillion, P5.063 trillion, P5.627 trillion and P6.249 trillion.

Disbursements were also lowered to P6.082 trillion, P6.630 trillion, P6.970 trillion and P7.466 trillion, respectively, from the previous assumptions of P6.182 trillion, P6.540 trillion, P7.027 trillion and P7.621 trillion.

The targeted budget deficits were widened to P1.562 trillion, P1.647 trillion, P1.604 trillion and P1.552 trillion from the previous P1.538 trillion, P1.477 trillion, P1.399 trillion and P1.372 trillion, respectively.

Meanwhile, the proposed 2026 national budget was set at P6.793 trillion, equivalent to 22.0 percent of gross domestic product (GDP) and 7.4 percent higher than the 2025 outlay of P6.326 trillion.