Gov’t spending seen to boost Q3 economic growth

LOOK: Socioeconomic Planning Secretary Ernesto M. Pernia and UN Resident Coordinator Ola Almgren talked about the country’s progress in achieving the Sustainable Development Goals during the #AskNEDA Media Briefing this morning. Almgren commended the Philippines for its work in line with the 2030 Agenda. (Photo: National Economic and Development Authority/Facebook)

MANILA — Socioeconomic Planning Secretary Ernesto Pernia said he expects Philippine economic growth to expand above 6 percent in the third quarter, as government spending picks up and inflation rate stabilizes.

“I think we’ll have a higher performance,” he told reporters Thursday on the sidelines of a public policy conference organized by the Philippine Institute for Development Studies (PIDS).

Pernia, also director-general of the National Economic and Development Authority (NEDA), said economic growth in July to September can be higher than the second quarter and the first semester average growth of 5.5 percent.

The slower growth in the second quarter was attributed to the continued effect of the delay in the passage of the 2019 national budget, coupled with the ban on public works and other spending leading up to the May elections.

Pernia earlier said the country’s gross domestic product (GDP) was expected to settle this year at 6 percent to 6.5 percent, well within the government’s 6 percent to 7 percent target for the year, as the country speeds up the implementation of infrastructure projects.

The NEDA chief further downplayed the impact on inflation expectations of the attack on Saudi Arabia’s production sites last Saturday.

He also did not see any need to revise the country’s inflation target, “not unless something like this is prolonged.”

“Saudi has said they will be back in business, full business by the end of September. So it’s an ephemeral thing, short-lived,” he added.

Cielito Habito, former NEDA chief and now a professor at Ateneo de Manila University, cited the global growth forecast of the International Monetary Fund (IMF) at 3.2 percent in 2019, with growth coming from emerging markets and developing economies, including the Philippines.

“So even though it is bad news that our GDP growth slowed down to 5.5 percent, still (it is) among the fastest growth rates of the world. So we can be quite proud of the fact that we are there,” Habito said during the policy conference.