Gov’t concedes Q2 GDP growth target missed

The country’s chief economist on Wednesday conceded that the economy unlikely expanded in the second quarter by 7.7 percent, or the average rate of growth needed in the second to fourth quarters to hit the full-year goal.

Socioeconomic Planning Secretary Arsenio M. Balisacan told senators during a briefing on the proposed 2016 budget that hitting the lower end of the 7-8 percent gross domestic product (GDP) growth target for the year would entail an average of 7.7-percent expansion in each of the three remaining quarters, after the economy grew by a dismal 5.2 percent during the first quarter.

When later asked by reporters if the economy could have grown by 7.7 percent in the second quarter, Balisacan, who is also the Director-General of the National Economic and Development Authority (Neda) replied: “Malabo (Unlikely). It’s too high.”

The government will release the second-quarter GDP growth figure on Aug. 27.

When pressed further if the second-quarter growth would at least exceed that of the first quarter as well as the 6.4-percent expansion posted in the second quarter of last year, Balisacan admitted that he was “getting worried” about the slower exports to date.

Government data released last Tuesday showed that exports contracted during the months of April, May and June, bringing the total value of exports in the first half to $28.804 billion, down 4.7 percent year on year.

Balisacan, nonetheless, told senators that even as exports continued to decline and manufacturing was also weaker in June, public-sector investment “quite improved” in the second quarter.

Despite external shocks coming from the economic slowdown in China and Europe, Balisacan noted that “there were instances in the past when we grew almost 8 percent” amid a weak global economy.

The Neda chief also expressed optimism that sustained business and consumer confidence would bolster economic growth moving forward.

“If we get investments to grow rapidly for the remainder of the year and exports to recover in the second half, given the confidence in the business and consumer sectors, growth of 7.7 percent [in the last two quarters] is not out of reach,” Balisacan said.