THE National Economic and Development Authority (Neda) said the impact of sustained growth is likely to be felt by the bottom 40 poorest of the poor population due to much lower food prices with easing in the inflation rate to 2.4 percent.
Neda Secretary Arsenio M. Balisacan said “with the inflation coming down, the impact of growth to employment and poverty will be favorable.”
He said the economic growth last year was eroded by the high inflation rate on food prices at 9.5 percent.
Balisacan said food prices are expected to be stable this year because of the government’s plan to import more rice. On poverty rate, the Neda chief said significant gains are expected. “We are more hopeful and optimistic on the impact of growth on poverty level,” he said.
The Development Budget Coordination Committee (DBCC) earlier maintained its macroeconomic growth forecast of 7 percent to 8 percent despite the expected weak tax revenues from petroleum products.
The forecast is based on the assumptions that there is no major shock compared with the economy’s performance during the first quarter of 2014, when the country was still hurting from the massive devastation brought by Supertyphoon Yolanda (international code name Haiyan) that struck the Visayas in November 2013.
Budget Secretary Florencio B. Abad, chairman of the DBCC, said foreign investments are expected to play hugely on economic growth, as well as increase in public spending in infrastructure.
He said the government is expected to utilize the P468-billion total carryover budget of 2014 for infrastructure, telecommunications and road projects of the Department of Public Works and Highways and the Department of Transportation and Communications. Most of the spending for the carryover budget will be for the capital outlays, he said.
Meanwhile, the DBCC maintained that its deficit ceiling will not exceed by 2 percent of gross domestic product, or P283.7 billion in nominal terms.
The DBCC said with the implementation of revised tax exemptions, the revenue targets are further reduced to P1.673 trillion from P1.72 trillion this year. At the same time, the staggering decline in world crude prices is expected to lower customs revenue targets to P436.5 billion from P465 billion.