DBM sees higher GDP growth in Q4

The national government is confident that the Philippines will enjoy a much higher economic growth in the final three months of the year due to the Aquino administration’s strong public spending, a cabinet official said.

In a statement, Budget Secretary Florencio B. Abad, said the country’s economy, as measured by its gross domestic product (GDP), may grow above six percent in the fourth quarter, surpassing its third-quarter expansion rate.

“We have now the momentum after a slow start in the first quarter at five percent, recovery in the second quarter at 5.8 percent, and sustained growth in the third quarter. It’s still possible to grow at six percent for the whole year of 2015.” Abad said.

The Philippines’ GDP in the period of July to September is the third highest in Asia after China and Vietnam.

“As in the third quarter, public spending will once again play a pivotal role in the economic expansion in the fourth quarter. Historically, fourthquarter has always been a strong quarter in terms of public spending as agencies rush to finish their projects,” Abad said.

The reforms that were introduced, like elimination of the need for SAROs, significant reduction of lump sums, and the advance procurement of goods and services, would boost government spending, Abad said.

As of end September this year, 96 percent of agency budgets have already been released, data from the Department of Budget and Management (DBM) showed.

“Government executives will even be motivated to improve performance further as the proposed SSL 2015, which, according to both Houses of Congress, is certain to pass this year. This will double their performance-based bonuses next year,” Abad said.

What will further boost spending, the official said is the pressure to finish infrastructure projects from political leaders in the run-up to the May 2016 elections.

“Performance is always an election platform and political leaders demonstrate that through the delivery of social services and public works projects,” he added.

Earlier, Socioeconomic Planning Secretary Arsenio M. Balisacan said that the third-quarter growth was “certainly an encouraging sign” of a steady growing economy of the Philippines.

“Growth in the first nine-months of 2015 is now 5.6 percent, making a 6.0 percent full-year growth very much likely given even better prospects for the last quarter. This makes the Philippines one of the fastest-growing major Asian economies,” Balisacan said.

In the third-quarter, the GDP was driven by the services sector, which increased to 7.3 percent from 5.6 percent. The agriculture sector also recovered during the period by 0.4 percent from a 2.6 percent decline posted last year.

Likewise, government final consumption expenditure accelerated from 3.9 percent to 17.4 percent, while the industry sector slowed down to 5.4 percent from 7.8 percent, PSA data showed.

For the final three-months of 2015, Balisacan expects the local economy will grow at a faster rate, adding the country needs at least 6.9 percent expansion to achieve a six percent full year GDP.