Finance sees GDP growing by about 6.8%
The “Build, Build, Build” program is expected to help the economy grow at a slightly faster pace this year, with $19 billion in official development assistance (ODA) commitments from East Asian countries seen bolstering infrastructure development, Finance Secretary Carlos G. Dominguez III said.
In a video interview with Fitch Ratings, Dominguez said he expected the full-year gross domestic product growth to be close to 6.8 percent, which was also the debt watcher’s forecast for 2018.
That will be higher than the 6.7 percent posted in 2017 but below the government’s 7-8 percent target range.
“The momentum on our ‘Build, Build Build’ is strong, and we are moving quite well in our infrastructure program,” Dominguez said.
Under the “Build, Build, Build” program, the government will roll out 75 “game-changing” flagship projects while spending up to P9 trillion on hard and modern infrastructure until 2022 to usher in the “golden age of infrastructure.”
He said the economy seemed to have had “taken a breather” in the second quarter, during which it grew 6 percent, the slowest in three years.
“However, in the first half it’s still a 6.3-percent [average GDP growth] rate. I think we can grow at a faster rate in the coming months, and we believe we’re not really in danger of overheating at the moment,” he said.
He noted that factories were still running below capacity, at 90 percent on average, so “we’re still within safe borders.”
Dominguez said that the passage of the Tax Reform for Acceleration and Inclusion (TRAIN) Act enabled the government to raise revenues “quite significantly” to finance the infrastructure program.
“In the first half of the year, our revenues are up 20 percent, and that is the basis of our additional spending,” he said.
“We are fortunate that our neighbors China and Japan have committed around $9 billion each in ODA money, which we are going to be using and we are using already for our ‘Build, Build, Build’ program.”
South Korea also pledged $1 billion in ODA, bringing to $19 billion the total pledges from the three East Asian countries so far, Dominguez added.—BEN O. DE VERA
