Q1 economic growth seen at 7-8% range

Sustained strong government spending likely helped the economy grow by between 7 and 8 percent, the government’s target range for the year, in the first quarter, Budget Secretary Benjamin E. Diokno said.

Diokno told reporters last week that the gross domestic product (GDP) growth goal for 2018 was attainable, with spending on public goods and services expected to jump by some 20 percent in the first three months.

In January, government expenditures jumped 15 percent to P228.7 billion from P198.1 billion a year ago.

The Bureau of the Treasury had attributed the increase in disbursements at the start of the year to “ramped up infrastructure spending as well as the implementation of the third tranche of compensation adjustment for government employees.”

However, Diokno said he still deemed the 15-percent climb in January government spending as “slow.”

“I still find it slow. Our budget now has quadrupled compared to 10 years ago—we have a huge budget. We are making up for past neglect,” Diokno noted.

Moving forward, Diokno said he expected growth in public expenditures in February to exceed the increase recorded in January.

“In fact, our interest payments are slower. So our disbursements are real spending, which is on services,” he said.

The Treasury noted that in January, “interest payments accounted for only 19 percent of total disbursements against the previous year’s 21 percent, showing that the growth in disbursements were for productive components of the budget.”

Expenditures net of interest payments grew 19 percent to P185.2 billion that month from P155.7 billion a year ago.