Gov’t confident it will meet 2015 GDP target
THE country’s Gross Domestic Product (GDP) grew by 5.2 percent in the first quarter of 2015, the Philippine Statistics Authority reported the other day. It was the slowest since 2011 when GDP rose by only 4 percent. As a result of the unexpected drop from the expected 6.4 percent, stocks fell sharply in the stock market while the peso-dollar rate deteriorated.
Far from being discouraged by the low GDP, however, the nation’s economic officials said the next three quarters will surely see a rebound in the economy. They know what caused the drop in GNP and they already have taken steps to correct it.
The drop in GDP was due mostly to the slower than programmed government spending. There was a decline in public construction. There were delays in the actual disbursement of funds.
There appeared to be no problem with the other segments of GDP. Consumer spending was steady in the first quarter of the year and is expected to further improve due to stable prices of commodities, a decline in oil prices, availability of more jobs, and high consumer confidence in the economy. Remittances from the 10 million Filipinos now working abroad are expected to improve. Business confidence is also up, according to the Bangko Sentral ng Pilipinas.
Agricultural production is expected to improve in the wake of government initiatives to mitigate the effects of the El Niño phenomenon. And foreign direct investments are expected to increase with the liberalized entry of foreign manufacturing and construction.
But the biggest factor in the GDP drop was low government spending and this is where the government has full control of the situation. President Aquino has now directed the various government departments, particularly the Department of Public Works and Highways (DPWH), the Department of Transportation and Communication (DOTC), the Department of Education (DepEd), and the Department of Agriculture (DA), to accelerate the implementation of their infrastructure projects.
Expect ations are high in this last year of the President’s six-year term. The target is 7 percent GDP growth at the end of the year. If this is achieved and ordinary Filipinos get to feel its impact, it would be great addition to the legacy of the Aquino administration.