Marcos gov’t still ‘optimistic’ about hitting 6-8% growth target
The Marcos administration is still “optimistic” about hitting its 6 to 8 percent economic growth target this year despite the slower-than-expected expansion seen in the first quarter, Budget Secretary Amenah Pangandaman said.
Pangandaman, chair of the powerful Development Budget and Coordination Committee (DBCC), said state spending would continue to be a major growth driver this year.
The DBCC is an interagency body that reviews and approves the government’s macroeconomic assumptions and fiscal program.
“We still expect GDP (gross domestic product) to accelerate throughout the year as domestic demand strengthens and public investments are sustained,” Pangandaman said in a statement.
“Finally, we remain optimistic that the Philippines will meet its growth target for 2025 of 6 to 8 percent, especially as the government remains strongly committed to achieving our medium-term plans,” she added.
Below estimate
Latest data showed GDP expanded by 5.4 percent year-on-year in the first three months. That was slightly faster than the 5.3 percent growth in the preceding quarter, but weaker than the 5.9 percent clip recorded in the same period last year.
At the same time, the figure fell short of the 5.9 percent median estimate of 12 economists polled by the Inquirer last week.
Analysts said the specter of global trade war bruised business confidence. Gross capital formation—the investment component of the GDP—grew by 4 percent in the three months ending in March, slowing down from 5.5 percent in the preceding quarter.
Amid the global trade storm, the economy drew most of its strength at home. Consumer spending expanded at a higher rate of 5.3 percent from 4.7 percent previously, thanks to easing inflation.
Gov’t spending
Notably, government expenditures jumped by 18.7 percent from 9 percent before, as agencies might have frontloaded their disbursements ahead of the election-related spending ban.
Even before the first quarter GDP data came out, Secretary Arsenio Balisacan of the Department of Economy, Planning and Development had admitted that aspiring for an 8-percent growth this year might not be realistic anymore due to uncertainties.
“This is why we cannot emphasize enough the important role that government spending performance plays in stimulating the economy, especially amid the expected slowdown in growth globally,” Pangandaman said.
