Gov’t: 7% GDP this year should be easy

Despite expectations of slower global growth, the head of the Duterte administration’s economic team yesterday expressed optimism the Philippines would achieve at least the lower end of its 7-8 percent growth goal in 2019 as the government ramps up infrastructure.

“We are maintaining a 7-percent GDP (gross domestic product) growth rate as a fighting target even as major multilateral institutions have adjusted global growth projections. We are building on our own momentum and on the massive economic investments we have programmed for this year,” Finance Secretary Carlos Dominguez III told members of the Financial Executives Institute of the Philippines during its inaugural meeting for 2019.

The International Monetary Fund had cut its global growth projection for 2019 to 3.5 percent from 3.7 percent previously amid “growing risks,” while the United Nations had forecast worldwide economic expansion to slow to 3 percent this year from the projected 3.1 percent.

Dominguez told reporters the government’s confidence came from strong domestic macrofundamentals.

“First of all, we’re not really a big international trader. Of course, we are affected by the headwinds but because we have this ‘Build, Build, Build’ program and we have good credit, we have good tax collections—we are quite insulated,” he said.

Under its banner infrastructure program, the government planned to implement 75 “game-changing” projects, half of which should be finished within Mr. Duterte’s term. The government, backed by new taxes, was aiming to spend over P8 trillion on hard and modern infrastructure until 2022.

Budget Secretary Benjamin Diokno told a separate press conference also yesterday that the Build, Build, Build and election-related spending for the midterm polls in May should shield the domestic economy from external shocks.

“The forecast for [this] year is very much attainable. Number one, our big projects will take off this year. Also, we have an election year,” he said.

Normally, during an election year, he said there was a 0.5 to 1 percentage point increase on top of the GDP growth.