GDP growth outlook cut to 5.7% in 2015

ANZ Bank slashed its economic growth projections for the Philippines this year and next year due to anemic spending by the administration of President Aquino.

In its latest research note, ANZ Bank lowered its gross domestic product (GDP) growth forecast for the Philippines to 5.7 percent instead of 6.1 percent this year and to six percent instead of 6.3 percent next year.

ANZ Bank said government spending continued to disappoint in the first half of the year.

“Public spending continued to disappoint in the first half of 2015, which led to a year-to-date budget surplus of P13.8 billion, far from the annual target deficit of P283.7 billion,” the investment bank said.

Latest data from the Department of Finance (DOF) showed the country recorded a budget surplus of P13.8 billion in the first six months of the year, reversing the P54 billion deficit recorded in the same period last year.

The government has penned a budget gap target of P155.08 billion for the first half of the year and P283.7 billion for 2015.

Revenues collected mainly by the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) went up 16 percent to P1.086 trillion from P933.7 billion, while expenditures rose nine percent to P1.072 trillion from P987.7 billion.

At this rate, ANZ Bank said the government would have to post an average of P49.6 billion deficit every month for the rest of the year to reach its target.

“Thus, we now believe the government’s deficit target of two percent of GDP is no longer attainable and we downgrade our 2015 fiscal deficit forecast to 0.08 percent of GDP,” the investment bank said.

The country’s GDP growth slowed down to 5.2 percent in the first quarter of the year from 5.6 percent in the same quarter last year amid weak government spending.

The government sees the GDP growing between seven and eight percent this year.

Socioeconomic Planning Secretary Arsenio Balisacan admitted that meeting the lower end of the government’s GDP growth target this year remains a challenge amid the weak global demand.

“It’s a big challenge to get the seven percent. But we’ll see,” Balisacan said earlier.

Latest data from the Philippine Statistics Authority (PSA) showed the country’s merchandise exports slipped 4.7 percent to $28.8 billion from January to June this year compared to $30.23 billion in the same period last year.