Finance chief sees faster GDP growth in H2

The head of the Duterte administration’s economic team remains optimistic that the growth of the economy in the second half would be faster on the back of gains made at the start of the year.

This was despite the slowdown in the year-on-year growth in gross domestic product (GDP) in the second quarter to 6 percent, bringing the first semester average to 6.3 percent.

The economy must expand by at least 7.7 percent in the second semester of the year to hit the lower end of the government’s full-year GDP target growth range of 7 to 8 percent.

Despite the below-target growth rate so far, Finance Secretary Carlos Dominguez said at the Kapihan sa Manila Bay forum on Wednesday that they “fully expect a stronger growth performance in the second half of the year.”

“We can confidently say the slower growth rate in the second quarter was exceptional. It did not indicate a medium-term trend. The other numbers are very promising,” Dominguez said, stressing that “domestic demand remains robust.”

For one, Dominguez noted that foreign direct investments (FDIs) had increased, as the latest Bangko Sentral ng Pilipinas data showed that job-generating FDIs jumped 49 percent to $4.8 billion as of May.

“Also, our exports of goods and services recovered to a double-digit growth of 13 percent in the second quarter from 6.5 percent in the previous quarter,” he said.

Dominguez also noted the record-high revenue effort as of the end of June.

Over the weekend, Finance Undersecretary and chief economist Gil S. Beltran said the Tax Reform for Acceleration and Inclusion (TRAIN) Act had helped jack up the share of government revenue to the economy to 17.12 percent, a record first half revenue effort.

In an economic bulletin, Beltran said the revenue effort as of June increased from 15.65 percent a year ago.

The share of tax and non-tax revenues to the GDP in the first half was “the highest-ever achieved during the first semester,” Beltran said.

Total revenue from January to June jumped 19.9 percent year-on-year to P1.411 trillion, over twice the nominal GDP growth of 9.6 percent during the same six-month period, he said.

Also, the tax effort rose to 15.23 percent from 14.22 percent last year, “similarly the highest first-semester tax effort ever achieved,” he added.

End-June tax revenue climbed 17.4 percent year-on-year to P1.255 trillion.

Of the increase in the share to GDP of taxes collected during the first six months, “almost a half or 0.4 percentage points is due to TRAIN and the rest or 0.61 percentage points to tax administration improvements,” Beltran explained. —BEN O. DE VERA