MANILA, Philippines — The Philippine economy is expected to recover in the final quarter of this year to keep its growth momentum despite setbacks in the first half, an economist-lawmaker has said.
After collating data from economic managers during budget briefings, House deputy speaker and 1-Pacman party-list Rep. Michael Romero said the country is well on its way to maintain its 6.2-percent gross domestic product (GDP) growth rate for 2019 as in the previous year.
“The actual GDP figure, however, will grow to $356.682 billion by yearend from $330.846 billion in 2018,” he told The STAR yesterday.
This will mean an increase in year-on-year absolute value by $25.836 billion and translate to $3,333 GDP per capita income or $200 higher than the 2018 figure.
Despite crises in the global economy, Romero stressed that the Philippine economy under the Duterte administration has maintained an above six-percent GDP growth since 2016.
In the administration’s first year, the country posted a GDP growth rate of 6.9 percent, which slightly went down to 6.7 percent in 2017 and 6.2 percent in 2018.
The lawmaker said the National Economic and Development Authority (NEDA) had adjusted the target GDP growth rate for 2019 from 6.4 percent after it slowed down in the first half of this year to 5.5 percent due to very low public and private spending.
Romero attributed this to the delay in enactment of the 2019 national budget.
He lamented that the economy incurred losses amounting to $8.917 billion or P463.686 billion from January to June, or about P77 billion per month, in both public and private revenues. “The delayed budget had serious repercussions; it really took its toll on our economy,” he pointed out.
The enactment of the P3.757-trillion national budget for 2019 was delayed after President Duterte vetoed some P95 billion in “insertions” by House members in the previous congress for infrastructure projects.
It was signed by Duterte only last April, prompting a reenactment of the budget during the first five months of this year.
But Romero is confident that the economy will bounce back in the second half of this year. He has suggested to economic managers that they ensure bigger utilization of funds.
“Government spending should be increased for economy for growth. The more you spend, the bigger the economy will be. Public and private spending churn the economy,” he stressed.
“We should increase spending without holding back,” the lawmaker said.
He cited for instance the Department of Public Works and Highways, which he said should go all out in its infrastructure projects – especially those delayed during the first half.
Romero said NEDA has already committed to increase public spending from July to December by seven percent as part of government’s catch-up plan.
The lawmaker said the traditional increase in remittances from overseas Filipino workers during the second half of the year is also expected to boost economic growth.
With these factors, he said the Philippines may be able to meet its projected 6.2 percent GDP growth for this year.
The lawmaker further suggested that adjustments be made in the calendar for budget appropriations.
“I will advise the DBCC (Development Budget Coordination Committee) to start the budget preparation early. Instead of submitting the budget to Congress in August, they should be ready with it by June or July so that Congress will have at least six months to finish the budget,” he explained.
With necessary reforms in place, he believed that the economy will further grow in 2020 and could meet the $425-billion target.