Gov’t urged to solve infra issues
The government must start pulling its own weight and focus on addressing infrastructure bottlenecks if the economy is to return to higher growth rates that can have meaningful effects on poverty alleviation.
Following the release of disappointing data for the third quarter, the International Monetary Fund (IMF) said the Philippines’ “growth story,” driven by consumer spending and investments, remained “intact.”
“Addressing the supply constraints and infrastructure-related bottlenecks…. through public financial management reforms appears to be the immediate priority for sustaining faster growth,” IMF Representative Shanaka Jayaneth Peiris said in an email.
Peiris at the weekend said the government would have to hike public spending while at the same time find a way to accelerate the implementation of its public-private partnership (PPP) to get more projects off the ground.
Last week, the government reported that the economy grew by 5.3 percent in the third quarter, the slowest annual growth since 2011. Quarter on quarter, the economy was at its most sluggish since 2009. Growth for the quarter missed all analysts’ projections.
Economic managers commented following the report that achieving the growth target for the year of at least 6.5 percent would be a “big challenge.”
To hit this goal, the economy would have to grow by at least 8.2 percent in the October-to-November period—a rate of expansion not seen in decades.
Last year, the economy expanded by 7.2 percent, which followed a 6.8-percent surge the year before.
Prior to the announcement, the IMF was already among the least optimistic about the economy’s growth prospects, projecting a 6.2-percent expansion for the Philippines this year. This forecast may have been too generous, given the third quarter number, Peiris said.
“The third quarter gross domestic product (GDP) number was somewhat below our expectations,” Peiris told the Inquirer. “With the third quarter outturn, the downside risks are greater, particularly to our 2014 forecast.”
However, he noted that consumption, construction, exports and private investment remained robust. “Therefore, the Philippines growth story of resilient consumption and rising investments remains intact,” he said.
