Citing “good” rates being offered by China, Japan and South Korea to finance priority projects and programs, economic managers on Tuesday increased the share of…
Citing “good” rates being offered by China, Japan and South Korea to finance priority projects and programs, economic managers on Tuesday increased the share of foreign borrowings to the total financing program in the next five years.
The Cabinet-level Development Budget Coordination Committee (DBCC) also raised the foreign exchange rate assumption for the period 2018-2022 to 50-53 to $1, from 49-52 previously, on expectations of a weaker peso in the medium term.
Felipe M. Medalla, a member of the Bangko Sentral ng Pilipinas’ Monetary Board, told a press briefing that the DBCC adjusted its forex assumptions not only for this year but also for the medium term in light of the huge fiscal stimulus in the United States.
“Tax cuts alone are a trillion dollars; US unemployment rates are low. There’s really no other direction but for US interest rates to rise. Therefore, there will be clearly movement of money to the US,” Medalla explained.
Also, Medalla noted that the “fairly high” economic growth expected in the coming years would also jack up mostly dollar-intensive imports for capital expenditures.
The DBCC kept the 7-8 percent gross domestic product (GDP) growth target for 2018 to 2022 following a 6.
