Gov’t to step up economic pump-priming
By Lira Dalangin-Fernandez
INQUIRER.net
First Posted 04:22:00 08/30/2008
MANILA, Philippines — The government will step up economic pump-priming efforts through infrastructure spending and other economic activities to offset the slowdown in economic growth in the second quarter, Malacanang said Friday.
Growth in the gross domestic product (GDP) slowed to 4.6 percent in the April-June quarter from 8.3 percent in the same period last year, as sharp increases in food and fuel prices forced households to tighten spending.
The National Economic Development Authority (NEDA) had forecast the second-quarter growth at 5.3-5.9 percent.
Press Secretary Jesus Dureza said the second-quarter GDP was "still respectable, given the threats to global economy."
He said the government was addressing the impact of the slower growth by accelerating expenditures on pro-poor programs while cutting back on non-essentials.
In a separate statement, Palace Deputy Spokesperson Lorelei Fajardo said the government would spend more on infrastructure development and other activities that would create more jobs.
"Government will keep monitoring the continued effects of prices on our people and will institute such measure t help alleviate their effects on our spending," she said.
Officials have cast doubt on this year's full-year growth goal of 5.5-6.4 percent, already revised downward and a sharp drop from the three-decade peak of 7.2 percent achieved in 2007, as soaring inflation eats into consumer demand.
Domestic consumption, which makes up about 70 percent of GDP, is fueled by the remittances from more than 8 million Filipinos working abroad, out of a total estimated population of 89 million.
Gross national product (GNP)—the GDP plus net factor income from abroad (NFIA), which includes remittances from overseas Filipino workers—grew 5.5 percent in the second quarter, decelerating from the 9.8 percent posted in the same period last year.
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