(Bloomberg) -- The economic team of Philippines' newly installed President Rodrigo Duterte lowered growth targets and projected a wider budget deficit as tax revenue disappoints.
Growth will probably reach 6 percent to 7 percent this year, Budget Secretary Ben Diokno told reporters in Manila Tuesday following a meeting of Duterte's economic team. That's down from a projection of 6.8 percent to 7.8 percent made 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 of the president, 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 will probably reach 2.5 percent of gross domestic product 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 set to range between 7 percent and 8 percent from 2018 to 2022, Diokno said.
The currency will probably remain stable and competitive, with officials keeping the peso forecast at 45-48 per dollar in its economic projections through 2022, central bank Deputy Governor Diwa Guinigundo said at the briefing.
To contact the reporters on this story: Andreo Calonzo in Manila at acalonzo1@bloomberg.net, Ditas Lopez in Manila at dlopez55@bloomberg.net. To contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net, Jason Koutsoukis
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