Neda not giving up on 2015 GDP growth goal
The country’s chief economist Wednesday said the government was sticking with its 7-8 percent economic growth target for this year, even as he admitted that hitting the lower end of the goal would already be a “big challenge” given low exports.
Economic Planning Secretary Arsenio M. Balisacan told reporters that while shipments of Philippine-made goods to overseas markets seemed to be affected by external shocks brought about by uncertainties in Greece and China, revenue from service exports such as business process management or BPM and tourism receipts continued to rise.
“It will be quite a big challenge to hit a 7-percent growth, but hopefully the economy will pick up in the second half,” said Balisacan, who is also the Director-General of the National Economic and Development Authority (Neda).
Balisacan said the challenge stemmed from weak exports.
A preliminary Philippine Statistics Authority report released last week showed that merchandise exports in May slid by 17.1 percent year-on-year to $4.899 billion which, Neda noted, was the steepest drop since December 2011.
The fast slide of export sales last May was a signal that the global economy was once again slowing down mainly due to economic troubles in China and Greece, Neda warned.
Total export revenue from January to May also went down by 5 percent year-on-year to $23.526 billion. The government had projected exports to grow by 7 percent this year.
“Globally, everything has been dragged down by the slowdown in global trade, (due to) all these uncertainties in China, hiccups in Europe, and even in the US,” Balisacan said.
Following the 5.2-percent gross domestic product (GDP) expansion in the first quarter, the economy must grow by 7.5 percent in the next three quarters to hit at least a 7-percent growth by the end of the year. The slower first-quarter growth rate came on the back of government underspending on public goods and services, coupled with weak exports.
Balisacan said the government was “not giving up” to achieve the 2015 growth target. “We have to work much harder, especially in terms of government spending,” he said.
The latest Department of Budget and Management data showed that total government disbursements rose by 5.5 percent year-on-year to P660.6 billion as of the end of April. However, spending on vital infrastructure and other capital outlays from January to April was 1.9 percent lower year-on-year at P91.9 billion.
Disbursements in April alone increased by 9 percent to P156.5 billion, as government spending on infrastructure that month jumped by 40.3 percent to P23.3 billion.
According to Balisacan, his continued optimism is based on expectations that private consumption will remain strong amid low inflation, robust remittances, cheap oil prices, and “still high” consumer confidence.
The Neda chief added the government was banking on faster-growing services exports to compensate for lower revenue from merchandise shipments.
