Gov't to adjust poverty rate targets

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Metro Manila (CNN Philippines, December 11) — The country’s top chief economist is looking to adjust the country's poverty rate target for 2022 after the government exceeded its initial goal halfway through President Rodrigo Duterte's term.

Socioeconomic Planning Secretary Ernesto Pernia on Wednesday said the initial target was to lift a total of 6 million Filipinos out of poverty during the six-year term of Duterte. But on December 6, government reported that 5.9 million Filipinos were no longer considered poor in 2018.

The Philippines Statistics Authority said the poverty incidence declined to 16.6 percent from 23.3 percent in 2015. Officials attributed this to several factors, including conditional cash transfers for the poor, tax reform initiatives, and aggressive family planning services.

Now the government wants to bring down the target to 14 percent.

"It’s a walk in the park na maabot natin yung 14 percent by 2022. By next year maabot na 'yun eh. We will probably change our target for the midterm update from 14 percent by 2022, we will make it 10 to 12 percent," he said in a media briefing.

Pernia estimated the poverty rate could even hit 11 percent by the end of the Duterte administration.

Growth goals trimmed

Meanwhile, the President's economic team announced it is scaling down growth targets for the next three years.

The inter-agency Development Budget Coordination Committee (DBCC) limited this year's growth projection to between 6 and 6.5 percent, narrower than the previous 6-7 percent estimate after softer economic activity in the first three quarters. Growth averaged 5.8 percent as of end-September.

From 2020 onwards, annual economic growth is seen to pick up to between 6.5-7.5 percent — faster than this year's pace but is a downgrade from the 7-8 percent target previously set by the Duterte administration.

In a separate report, the Asian Development Bank said the Philippine economy will likely grow by just 6 percent this year, unchanged from its earlier forecast despite some downgrades for neighboring countries.

The government is looking to collect ₱3.15 trillion in revenues this year, and spend ₱3.76 trillion by yearend. As a developing economy, the Philippines spends more than the funds it can currently raise to fund social services and high-impact infrastructure projects. By 2020, revenues are seen to surge to ₱3.49 trillion versus spending at ₱4.16 trillion, which would fall within the fiscal gap programmed by the state equivalent to 3.2 percent of gross domestic product (GDP).

Bigger 2021 budget

The Department of Budget and Management (DBM) said it plans to propose a ₱4.64-trillion spending plan for 2021, just as Congress wraps up deliberations on next year's budget. The 2021 proposal would be 13.3 percent higher and is projected to fund "anti-poverty and peace-sustaining measures" like the Universal Health Care Program, Pantawid Pamilyang Pilipino Program, and the annual block grant and revenue shares to be transferred to the newly-created Bangsamoro Autonomous Region in Muslim Mindanao.

The DBCC batted for the "speedy passage" of the Corporate Income Tax and Incentives Rationalization Act (CITIRA), which it expects to boost public coffers alongside higher excise taxes on alcoholic drinks and e-cigarettes.

"Quickly completing the passage of the remaining tranches of the tax reform will ensure a steady revenue flow and equitable sharing for the government’s social and infrastructure programs while securing fiscal stability long into the future," said the DBCC, composed of the DBM, Department of Finance, and the National Economic and Development Authority.

READ: PEZA chief changes heart, now favors CITIRA bill

Meanwhile, inflation is expected to stay benign at 2.4 percent this year, returning to the 2-4 percent target band set by the Bangko Sentral ng Pilipinas. The exchange rate has also been revised to range from ₱51-52 versus $1 this year, stronger than the projections back in July.

Assumptions for world crude oil prices have also been reduced to a narrow range of $63-$64 per barrel, before inching up to $55-$70 in the next three years.

CNN Philippines' Ina Andolong and Melissa Luz Lopez contributed to this report.