The head of the Duterte administration’s economic team vowed to restore the country’s growth path to previous levels after a disappointing first quarter gross domestic product number caused by the delayed passage of the national budget.
In particular, Finance Secretary Carlos Dominguez III said the government was doubling its efforts to accelerate spending on badly needed infrastructure—spending whose multiplier effects were expected to ripple across the domestic economy.
“We are confident we can bring our pace of growth back on track in the second half of the year,” he said in a speech to members of the Management Association of the Philippines. “The majority of our people see a better life for themselves this year. We will not disappoint them.”
This catch-up plan involves the government spending some P2.996 trillion from the second to the fourth quarter of the year, with infrastructure disbursements accounting for almost a third of the amount at P792.97 billion, he said.
Economic growth in the first quarter of 2019 came in at only 5.6 percent—the slowest pace in four years—after Congress wrangling over this year’s national budget resulted in underspending on infrastructure of almost P1 billion a day.
Dominguez told businessmen that the economic team had reviewed the spending plan for the rest of the year and identified areas where government could speed up public investments to enable the economy to hit a growth rate above 6 percent for the whole of 2019.
He said the Department of Agriculture had also crafted its catch-up plan to energize agriculture and to contribute significantly to GDP growth this year.
“In addition to the public sector, we are hoping private construction will perform as we expect. Private sector construction will help supplement public spending to provide the stimulus for overall growth to pick up,” he said.
Meanwhile, the Finance chief said the clean sweep by administration-backed candidates in last month’s midterm elections illustrates the desire of the people for the President to continue his reform program.
The latest credit ratings received by the Philippines—the higher investment grade of “BBB+” from Standard & Poor’s and the “BBB” rating affirmed by Fitch—are also votes of confidence, this time by the international community, in the Duterte administration’s reform agenda, he said.
“We have reached the midpoint of the Duterte administration,” Dominguez said. “There is much to celebrate but also much bigger goals that we have yet to accomplish. President Duterte enjoys broad and profound support from our people. That strong support was most recently expressed in the just concluded midterm elections.”
He also underscored the need for the Executive and Legislative branches to work together under the incoming 18th Congress to create a more business-friendly environment in the country through the passage of the Foreign Investments Act, the Retail Trade Liberalization Act and amendments to the Public Service Act.