2015 growth likely missed lowered 6% goal

THE ECONOMY likely expanded by less than the 6-percent “realistic” growth rate predicted for last year, mainly due to weak exports, according to economists polled by the Inquirer last week.

The government will announce the gross domestic product (GDP) growth figures for the fourth quarter as well as the entire 2015 on Thursday.

The domestic economy expanded by an average of 5.6 percent during the first three quarters of last year.

The government’s official growth target for 2015 was 7 to 8 percent, but economic managers had already conceded that the economy could only grow by 6 percent, which called for a GDP growth rate of at least 6.9 percent in the fourth quarter.

Pauline E. Revillas of Metrobank’s research department projected fourth-quarter growth at 5.9 percent to bring the full-year figure to 5.7 percent.

“The main drag to the fourth quarter growth would be the poor performance of the exports sector, which was affected still by the fragile economies of major trading partners and the strong US dollar. Add to that the higher growth of imports which meant that the country spent more relative to what it earned from external trade,” Revillas explained.

The value of merchandise exports slid for the eighth consecutive month last November, bringing the 11-month total down by 5.8 percent to $53.988 billion, the latest government data showed.

The National Economic and Development Authority had also conceded that 2015 ended with a drop in exports of goods amid weak global demand.

Standard Chartered Bank economist for Asia Jeff Ng had a similar forecast for both the fourth quarter and the entire year, citing that “external demand likely remained a drag as merchandise export growth continued to fall in October and November.”

“However, strong growth in capital goods and raw material imports suggests that domestic growth remains robust. Government officials have also said that government and infrastructure spending increased in the fourth quarter. Furthermore, services exports should have helped at the margin,” Ng said.

ING Bank Manila senior economist Joey Cuyegkeng, meanwhile, has a slightly higher fourth-quarter growth forecast of 6 percent, although he also expects the 2015 average to settle at 5.7 percent.

“Domestic demand plus the stimulus from increased government spending were bright spots” during the fourth quarter, Cuyegkeng said.

The Department of Budget and Management earlier said government spending jumped by 10 to 16 percent in the fourth quarter of last year, equivalent to about P609.6 billion spent on public goods and services.

The estimated expenditures figure for the October to December period exceeded the P525.5 billion in actual disbursements during the fourth quarter of 2014, but below the program of almost P652 billion.