The government’s latest estimate of 7-9% growth in the gross domestic product (GDP) for 2022 is just a fantasy, said research group IBON. The Development Budget Coordination Committee (DBCC) has had a poor record of projecting economic growth in the last five years with their estimates always off the mark. Worse, their narrow-minded fiscal conservatism is the biggest factor preventing more rapid recovery, said the group.
The DBCC presented their latest GDP growth rates for next year as deliberations on the 2022 national budget in the House of Representatives (HOR) started today. While lowering estimates for 2021 to 4-5% from the previous projection of 6-7%, the original target of 7-9% for 2022 was maintained.
After 2017, the Duterte administration has never been able to meet its bloated growth targets, said IBON. At the start of the 2018 budget briefings in 2017, the DBCC projected 2018 growth to be “7-8%” – the eventual growth was just 6.3% or much lower. It also projected 2019 growth to be “7-8%” during the 2019 budget briefings a year later, but growth was even slower at 6.1 percent.
At the 2020 budget briefings, the projected “6.5-7.5%” growth rate for 2020 was eventually made impossible by government’s over-reliance on lockdowns to control the pandemic, the group said. Subsequent adjustments were however also off the mark. In May 2020, growth was projected at negative 3.4-2% and lowered further to negative 5.5% in August. Even when the projection was lowered a third time in December, to negative 9.5-8.5%, the eventual figure was still lower at negative 9.6 percent.
IBON also noted that at the 2021 budget briefings, growth in 2021 was projected at “6.5-7.5%” or a mindless repetition of earlier targets. But first semester GDP growth in 2021 is only at 3.7% and this original projection has again not been met. The group said that given this poor track record by the DBCC, there is no reason to expect that the current 7-9% projected for 2022 will materialize.
The momentum of economic decline that started with weakening economic growth in every year since the Duterte administration began in 2016 is made many times worse by the current lockdown-induced economic distress and fiscal inaction, said IBON. The 7% growth in 2016 slowed to 6.9% (2017), 6.3% (2018), and 6.1% (2019).
IBON said that under the Duterte administration, growth projections have unfortunately been reduced to just another propaganda tool for hyping imagined economic benefits for the people. In the context of the 2022 budget now being deliberated, unrealistic growth projections are being used to justify inaction. High growth rates are estimated to distract from how the proposed 2022 budget falls far short of providing the level of fiscal stimulus so needed by the floundering economy, said the group.