IMF urges DOF to adopt CAEM for better macroeconomic forecasting

The International Monetary Fund (IMF) has urged the Department of Finance (DOF) to enhance its macroeconomic forecasting system, citing a lack of comprehensive framework for consistent analysis and forecasting.

A recent scoping mission by the IMF revealed that DOF staff lacks formal training in advanced economic models like the Globally Integrated Monetary and Fiscal model (GIMF), which limits its effectiveness.

The IMF proposed adopting the Comprehensive Adaptive Expectations Model (CAEM) to better fit the Philippines' economic context, aiming to improve policy analysis and fiscal planning.

A structured training program is recommended for DOF's technical staff to develop skills in macroeconomic modeling and forecasting techniques, supported by IMF experts through hybrid engagements.

The initiative aims to strengthen the DOF's capacity for long-term economic stability amidst post-pandemic uncertainties by establishing regular forecasting practices with institutional support.