Herrera asks the DBCC to update its 2023 proposed national budget due to the forex and inflation rate in the Philippines.
Rep. Bernadette Herrera asked the Development Budget Coordination Committee (DBCC) to prioritize updating its annualized 2023 foreign exchange (forex) rate targets and other macroeconomic assumptions.
Given that the peso has fallen by more than 13 percent against the US dollar since the currency rate exceeded P52 to $1 on March 8, and that inflation has been above 4 percent since April, the need to update the 2023 budget priorities framework is high, coinciding with the effects of the forex rate to the 2023 national budget.
The forex rate assumption for 2023 is P50-P53 per dollar. However, from January 1 to June 13, the forex rate ranged from P50 to P52, then from June 14 to September 27, it broke over P53 and has already depreciated to nearly P59.
This is concerning because P59 is far from the P50-P53 assumption in the proposed national budget. It was even far off since June 14. In actuality, the average rate between January 3, 2022 and September 27, 2022 is P54.98 to $1, which is well over the P53 upper end of the budget projections.
“Let us remember that the forex and inflation assumptions in the 2023 budget were also adopted in an approved resolution by Congress.” Herrera added.
The forex rate may also have an impact on fuel prices, imported rice, imported sugar, imported wheat and flour, and imported fish and cattle, therefore inflation assumptions may need to be reviewed as well, especially since inflation has climbed from 4.0 percent in March to 6.4 percent last July and 6.3 percent last August.
A lot of review and update needs to be done especially since the proposed national budget does not correspond with the actual forex and inflation rate that is happening right now in the country. If the high forex and inflation rate continues until 2023, there’s going to be a discrepancy in the proposed 2023 national budget.
Tags: #Forex, #Inflation, #DBCC, #ProposedNationalBudget, #Update