Pernia: Q2 GDP growth likely better than 1st quarter but slower than a year ago
SECOND- QUARTER gross domestic product (GDP) growth likely raced faster than the first three months’ pace on the back of continued strong public spending but still slowed from the yearago clip that was fueled partly by expenditures related to the May 2016 national elections, the country’s chief socioeconomic planner said on Friday last week.
“Government spending on infrastructure projects has already shot up in Q2 because there’s a lot of road expansion, including the connector roads and the link road at the harbor area,” Socioeconomic Planning Secretary Ernesto M. Pernia during a roundtable discussion with BusinessWorld’s editors and reporters.
Pressed for his latest estimate ahead of the official secondquarter GDP report on Aug. 17, Mr. Pernia replied: “I think better than Q1” which saw 6.4% growth, though “hindi siguro ( maybe not)” as fast as the 7.0% logged in
2016’s second quarter that rode on election-related spending.
The first quarter’s 6.4% pace fell short of market expectations, but it still made the Philippines second- fastest in those three months among major Asian economies next to China, which expanded by 6.9%.
The government targets GDP growth to clock 6.5-7.5% this year from 2016’s actual 6.8% that was near the top end of an official 6-7% goal.
The first quarter’s slowerthanexpected GDP expansion was attributed partly to base effects from year-ago election-related spending, especially ahead of a public works ban that ran from March 25 to May 8 last year.
The Department of Budget and Management ( DBM) released over the weekend its assessment of government disbursements in the second quarter that showed infrastructure and other capital outlays growing more than five percent to P131.6 billion from P124.7 billion in 2016’s comparable three months, exceeding a P127.7-billion program by three percent.
That put infrastructure spending at P249.1 billion last semester, about 8.8% more than the year-ago P229 billion and about five percent more than a P236.6billion program set for 2017’s first six months.
June alone saw infrastructure spending at P51.9 billion, 11.4% billion more than the year- ago P46.6 billion and 12.2% more than May 2017’s P46.2 billion.
DBM had said in its report that the infrastructure spending boost was a “result of the implementation of road infrastructure projects of the DPWH (Department of Public Works and Highways), payments for completed irrigation projects implemented by the NIA (National Irrigation Administration)… and some capital outlay projects of state universities and colleges (e.g., construction or renovation of buildings, purchase of machinery and equipment).”
DBM also cited DPWH’s “accelerated project implementation.”
Budget Secretary Benjamin E. Diokno had said early in May that he expected government spending, especially on infrastructure, to have started picking up in the second quarter as a result of monthly meetings with officials of top-spending departments like the departments of Agriculture, of Education, of Health, of Transportation and DPWH in a bid to prod them to keep to their respective expenditure programs.
The Duterte administration is looking to increase state infrastructure spending to an equivalent of 7.1% of GDP by the year its term ends in 2022, from the 5.4% of GDP programmed this year.
This is intended to spur the country’s growth to an annual average of 7-8% from 2018 to 2022.
The government believes such pace of economic expansion is needed to slash unemployment rate to 3-5% by 2022 from 5.5% last year and achieve its bottom line of cutting the national poverty rate to 14% also by then from 21.6% in 2015.
It also hopes to catapult per capita gross national income from $3,550 in 2015 to at least $5,000 by 2022, which Mr. Pernia said last Friday should help Filipinos decide to look for jobs at home. “Our export of labor should really just be a temporary phenomenon. The President always keeps on saying that we should have more job opportunities here, more rewarding, more satisfying, so it wouldn’t be necessary for Filipinos to go abroad.”