NEDA’s Pernia says ‘miracle’ if 2017 GDP hits 7.5%
THE government’s chief economic planner said it would take a “miracle” to hit the high end of the off icial growth target for 2017, even with the outlook positive due to a resurgence in exports and strong infrastructure spending.
“Not this year. It will take a miracle to reach 7.5% at this point,” Socioeconomic Planning Secretary Ernesto M. Pernia told reporters Wednesday on the sidelines of a Senate hearing when asked whether the Philippine economy can hit the upper end of its 6.5-7.5% gross domestic product (GDP) target band this year.
“I think if we hit close to the mid range, we’ll be happy with that. Higher or lower than the mid-range,” according to Mr. Pernia, head of the National Economic and Development Authority (NEDA).
The Philippine economy rose 6.4% and 6.5% in the first and second quarter, respectively. In 2016, GDP growth in the third quarter was revised down to 7%, and hit 6.6% in the fourth quarter.
To pull economic growth to an average of 7.5% by the end of the year, GDP should grow 8.6% in the next two quarters.
Still, Mr. Pernia said that he hopes to see third quarter GDP growth outstripping the second quarter’s due to the rise in exports and government spending on infrastructure.
“I think the external economy is favorable, so in terms of our exports, I think they enjoy good prospects. And then also the spending on infra is going to escalate over the next three months, (and) especially in 2018,” said Mr. Pernia.
“We’ll be within the range for sure. It’s a broad range so that’s a very safe projection,” he added.
In July, the first month of the third quarter, merchandise exports rose 10.4% to $5.28 billion.
Meanwhile, total exports for the first seven months hit $36.57 billion, up 13.9%.
On the other hand, government expenditure grew 11% that month to P245.1 billion. Of this total, disbursements for infrastructure and other capital outlays stood at P48.4 billion in July, surging 25%.
State spending in the seven months to July posted a 9% expansion to P1.58 trillion. Infrastructure outlays meanwhile rose 11.1% to P297.5 billion.
The government wants infrastructure spending to be equivalent to 5.4% of GDP this year, and is aiming to ramp it up to 7.1% of the economy by 2022.
This is intended to spur the country’s growth to an annual average of seven to 8% from 2018 to 2022. —