By Joann Santiago
MANILA, April 8 (PNA) — Economic managers are confident of sustained recovery of the Philippine economy this 2015, thus, they maintained the seven to eight percent growth target for this and next year.
This, even as the inter-agency Development Budget Coordination Committee (DBCC), in its meeting Tuesday, proposed some changes in economic targets partly due to external developments like the looming US interest rate normalization and the drop in oil prices in the international market.
In a briefing Tuesday night, Socio-economic Planning Secretary Arsenio Balisacan said they are considering domestic growth to be “good.”
”It could be a good one considering that we don’t have any major shock,” he said.
In the first quarter of 2014, domestic growth, as measured by gross domestic product (GDP), slowed to 5.7 percent from quarter-ago’s 6.3 percent and year-ago’s 7.7 percent due to the impact of the calamities that hit the country in the last quarter of 2013.
The slower growth continued until the third quarter of the year due also to the congestion in Manila ports after the Manila City government implemented an expanded truck ban from February to September last year.
However, the domestic economy posted a recovery in the last quarter of last year when it grew by 6.9 percent, better than quarter-ago’s 5.3 percent and year-ago’s 6.3 percent.
For the whole of 2014, the economy turned in a 6.1 percent expansion, below the government’s 6.5-7.5 percent target.
Balisacan, who is also the Director General of the National Economic and Development Authority (NEDA), said another factor that would fuel the economy is the delay in last year’s spending, which is only being obligated this year.
”So accelerated government spending’s impact in the economy will be felt in this quarter and the next,” he said.
For the rest of the year, Balisacan said hopes are up and that the growth target is “within reach with sufficient confidence.”
He said the usual growth drivers remain strong namely the business process outsourcing (BPO) sector, the services sector, remittances and household consumption.
He also said that foreign investors continue to put their funds in the domestic economy, thus, increasing investments that continue to compliment domestic expansion.
”It’s still early. It’s just the start of the second quarter but hopefully with the help of lack of major shocks in domestic and external (economies) for thethe rest of the year, so far, we are seeing quite robust growth for the year,” he added.
Relatively, Budget and Management Secretary Florencio Abad disclosed that the government has additional budget for this year and the succeeding years since there is total of Php 468 billion carry-over budget from 2014.
He said they assumed to use about Php 160 billion of this budget this year to ensure that priority programs will be implemented.
He explained that the carry-over budget came from unimplemented projects, mostly of the Department of Public Works and Highways (DPWH) and the Department of Transportation and Communication (DOTC), due to reforms instituted by the Aquino administration.
Among these projects are the irrigation projects, which are now required to be geo-tagged so that it can be checked online even by the public.
”The carry-over fund is mostly due to operational inefficiencies, which we are addressing right now,” he said.
Abad said they have made adjustments on the operational and execution capacity of the various government agencies so that they can keep up with the faster growth of the domestic economy.
Relatively, government underspending is a big factor in the below-target growth of the domestic economy in 2014.
Abad said underspending “is a phenomenon that has surfaced because we prioritized the use of public funds.”
He, however, said that because of the lessons they learned last year, government expenditures will be better this year.
Asked on how government spending looks like in the first quarter of the year, Abad said: “It’s much, much better than in previous quarters.” (PNA)