By Leslie Gatpolintan
The country’s chief economist is optimistic the government will hit its target growth rate this and next year, given a strong push from consumption and infrastructure spending.
Socioeconomic Planning Secretary Ernesto Pernia said he agrees with the Development Budget Coordination Committee’s (DBCC) gross domestic product (GDP) growth numbers at 6 percent to 6.5 percent this year.
“In the fourth quarter, consumer spending really got boosted by bonuses, OFW (overseas Filipino workers) remittances also rose 7.7 percent in October, and that also contributed to increased consumer spending which accounts for about two-thirds of GDP,” he told reporters Wednesday during the year-end media briefing.
Pernia said the country’s “catch-up plan” on spending on infrastructure projects has also some impact on increasing economic growth from October to December.
National Economic and Development Authority (NEDA) Undersecretary Rosemarie Edillon also cited private consumption will be “really robust” given the slow inflation, especially food inflation as well as government consumption.
“Investment spending is also very hefty especially this fourth quarter, actually leading to the fourth quarter,” she said, adding that tourism receipts are expected to post gains with an offshoot of the Southeast Asian Games (SEA Games).
Edillon said the domestic demand will more than makeup for slow external demand.
The country’s GDP surged by 6.2 percent in the third quarter, bringing the nine-month average to 5.8 percent
From 2020 to 2022, Pernia, also NEDA Director-General, said economic planners are targeting a 6.5 percent to 7.5 percent GDP growth.
“The main advantages there would be the budget would have been passed by then before the end of the year so there will be no reenactment of the budget for 2020 and so that would already be a good start for the year and in the home stretch, government spending on infrastructure will increase further because we want to finish as many infrastructures as possible,” he added.
Pernia said consumption spending is also a growth driver as inflation remains stable.
On the downside, he said the trade war between the United States and China is “still continuing although it has softened a bit and we hope it will soften further.”
“Of course, our natural disasters which are a common phenomenon in the Philippines and possible water shortage in the summer months especially given that the concessionaires are now kind of setback in their plans, or maybe they will be pushed forward ahead. They will be pressured to deliver better services in the coming year and possible delays in infrastructure projects,” he added.
(First published in PNA)