By Leslie D. Venzon
MANILA, June 2 (PNA) — The Philippine government will continue to aggressively pursue economic reforms especially in public financial management to speed up spending and stimulate economic growth this and next year, according to a senior National Economic and Development Authority (NEDA) official.
NEDA deputy director general Emmanuel Esguerra said such reforms are very critical given the important role of government spending in boosting the country’s gross domestic product (GDP) amid weak external demand.
“This really requires that government spending is able to bridge that gap but at the same time government spending is done in the right places. Meaning to say, the right projects are financed (and) the projects are also done correctly and efficiently in the most cost effective manner possible. I think that this will still be a very important aspect of governance,” Esguerra said in an interview.
Sluggish government spending and slumping exports have been cited as major causes for the country’s first-quarter slow growth at 5.2 percent from last year’s 5.6 percent.
Esguerra said most emerging economies or Southeast Asian economies including the Philippines now depend on domestic sources of growth amid the general weakness in the external sector.
He noted that domestic investments and government spending are thus imperative to boost internal demand.
“For the Philippines, I think the two go together. We still believe that the private sector is the main engine of growth but the private sector normally cannot do it alone because the right conditions should be there,” he added.
The NEDA official said the country needs to create an environment conducive for doing business.
“In other words, the cost of doing business is reasonable, less red tape the better. And then of course infrastructure development because that is a very critical factor in crowding in private investments and in giving the business sector, the private sector the confidence to invest,” he further said.
Despite sluggish government spending in the first quarter, Esguerra was optimistic that the country would achieve its infrastructure spending target equivalent to five percent of GDP by 2016. (PNA)