By Chino S. Leyco
The country’s economic growth will fall within the government’s target in the next three-quarters (or at least in the second half of 2019), as slowing rate of increase in consumer prices is seen to encourage consumer spending, the Department of Finance (DOF) said.
Based on the latest DOF economic bulletin, Finance Undersecretary Gil S. Beltran expressed confidence that the country’s Gross Domestic Product (GDP) will expand by at least 6.0 percent in April to December this year following the below-target growth in the first quarter.
Beltran explained the final approval of the delayed 2019 national budget will also add fuel to growth.
“Slower inflation will continue to boost consumption spending. On the other hand, the passage of the General Appropriations Act will enable government to resume public construction growth and bring back GDP growth above 6.0 percent in the quarters ahead,” Beltran said.
The Philippine economy slowed in January to March this year to 5.6 percent due to reenacted budget, which restricted the Duterte administration to increase spending on social services and infrastructure program.
Meanwhile, inflation rate broke its sixth consecutive months of slowdown last month after it inched up to 3.2 percent.
But despite the slight increase in inflation, Beltran noted that it was the fourth straight month that the rate fell within the Bangko Sentral ng Pilipinas’ (BSP) target range of 2.0 percent to 4.0 percent.
The finance official also noted that month-on-month inflation dropped slightly to 0.17 percent in May from 0.25 percent in April.
“This moderation in month-on-month inflation is largely attributed to the continued stabilization of food prices, in particular rice,” Beltran said.
Prices of rice, fish, and sugar declined by 0.58 percent, 0.44 percent and 0.17 percent, respectively, last month compared with April.
Beltran said the drop was due to the President’s memorandum orders streamlining the flow of food supply and the passage of the law liberalizing rice imports.
Last week, Finance Secretary Carlos G. Dominguez III said the Duterte administration can bring the robust economic growth rate back on track on the second semester of the year.
Dominguez said the government has already identified areas where it can speed up public investments to enable the economy to hit an above six percent growth for this year.
“We are confident we can bring our pace of growth back on track in the second half of the year. The majority of our people see a better life for themselves this year. We will not disappoint them,” Dominguez said.
According to Dominguez, the economic managers have formed a catch-up plan, which involves government spending of around P2.996 trillion from the second to fourth quarters of the year.
Under the P2.996 trillion catch up plan, infrastructure disbursements would account for almost a third of the amount at P792.97 billion, Dominguez said.
He added the Department of Agriculture has also crafted its catch-up plan to energize the anemic agriculture sector and committed it to contribute significantly to GDP growth this year.