Philippine President Rodrigo Duterte is facing a slower economy and a wider budget deficit, just weeks into office.
Duterte’s economic team slashed its gross domestic product (GDP) growth target and projected a bigger operating shortfall thanks to disappointing tax revenue, Bloomberg reports.
Growth will probably reach 6 percent to 7 percent this year, Budget Secretary Ben Diokno told reporters in Manila Tuesday after a meeting of Duterte’s economic team.
That’s down from a projection of 6.8 percent to 7.8 percent by the previous administration.
Duterte, a 71-year-old former mayor who took office last week, has focused his attention on fighting crime and corruption, leaving economic management to his finance minister, Carlos Dominguez, a childhood friend, and Diokno.
They face the challenge of maintaining investor confidence and keeping growth going in an economy that expanded the fastest in Asia in the first quarter.
The budget deficit might come in at 2.5 percent of GDP this year and 3 percent in 2017, mainly because of revenue shortfalls, Diokno said.
The government will continue to meet 80 percent of its borrowing needs from the domestic market and fund 20 percent abroad, he said.
Next year’s growth target was lowered marginally to 6.5 percent to 7.5 percent from 6.6 percent to 7.6 percent set by the previous administration.
Growth is expected to be between 7 percent and 8 percent from 2018 to 2022, Diokno said.
The peso is expected to remain stable and competitive, with officials keeping the forecast at 45-48 against the US dollar through 2022, central bank Deputy Governor Diwa Guinigundo said.
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