6.5% growth in 2017 within reach, says gov’t

Economic managers expect the Philippines to achieve at least a 6.5-percent gross domestic product (GDP) growth this year on the back of sustained robust consumption by both the government and the private sector.

“Given the economy’s performance during the first half of 2017, the lower end of the full year GDP growth target (6.5-7.5 percent) is well within the reach of government; the economy only needs to grow by 6.5 percent in the second half to accomplish this. This is also in line with market expectations,” the Cabinet-level interagency Development Budget Coordination Committee (DBCC) said in its Midyear Report on the Fiscal Year 2017 National Budget.

The economy expanded by nearly 6.5 percent in the first half.

“Household consumption spending will be supported by high consumer confidence and modest inflation. Oil prices are expected to remain moderate as global oil stocks are close to record highs, contributing to subdued energy prices,” the DBCC said in the Sept. 28 report.

Also, “government consumption and public construction will further support demand as national government disbursements are expected to improve further in the second half of 2017,” the DBCC added.

The Duterte administration is ramping up infrastructure spending in line with its ambitious “Build, Build, Build” program aimed at introducing the “golden age of infrastructure.”

Under the program, the government will roll-out 75 flagship infrastructure projects, with about half targeted to be finished within President Duterte’s term, alongside plans to spend a total of up to P9 trillion on hard and modern infrastructure until 2022.

Economic managers also remain bullish of merchandise and services trade this year, as “exports of goods and services are seen to remain strong due to the recovery of global trade, accompanied by the growth of inbound tourists and strong BPO [business process outsourcing] revenues.”

However, the DBCC said the slowdown in construction investments and related expenses from the private sector should be monitored closely.

In the case of government expenditures, “in spite of measures to accelerate infrastructure spending … delays could occur due to unforeseen circumstance such as weather disturbances,” the DBCC said.

“Delays in and the watering down of legislative measures intended to correct leakages and augment revenues could also be an area of concern,” the DBCC added.

The DBCC also admitted that “rising political uncertainties may also affect the economy.” —BEN O. DE VERA