NEDA chief projects Q4 economic improvement

Balisacan assured that the government is continuously monitoring the effects of El Niño and so far, they have not seen a major upshot. (Photo: Office of the President via Presidential Communications (Government of the Philippines)/Facebook)

MANILA – National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan is confident that the fourth quarter of 2023 will be an improvement of the 5.9 percent expansion posted during the third quarter.

“I haven’t seen the numbers but [I] hope it will be good, because our leading indicators are good [like the] labor market,” Balisacan told reporters on the sidelines of the annual reception for the banking community in Manila on Friday night.

“Hopefully [it will be better than the third quarter] because our target, the lower end of the range of 6 to 7 percent, I’ll be happy [if] we get close to it even if it’s lower,” he added.

The Philippine economy grew by 5.9 percent in the third quarter of 2023, bringing the year-to-date economic expansion to 5.5 percent.

The Philippine Statistics Authority will release the fourth quarter and full-year economic expansion on Wednesday.

“So far the indicators, those factors that influence economic activities, are associated with economic activities, like the labor market, that’s very encouraging. Inflation has continued to decrease, reaching its lowest point in 21 months, those are encouraging,” Balisacan said.

While exports and imports declined last year, Balisacan is banking on domestic consumption to drive growth.

“What goes to GDP (gross domestic product) is exports minus imports…but the economy is far more — it’s largely domestic, the high share of domestic component of GDP is what gives you the confidence, I think despite the high inflation, the domestic spending is quite robust,” he said.

“Of course, it could have been much better if the inflation had declined faster than what we’ve seen. But I think the fact that inflation seems to continue to decrease should give confidence to our people,” he added.

Balisacan assured that the government is continuously monitoring the effects of El Niño and so far, they have not seen a major upshot.

He sees that the country will maintain the economic momentum with respect to growth, employment generation, and continued reduction in inflation.

Charter amendments

Meanwhile, Balisacan expressed support for amending the constitution but pointed out that it should be limited to restrictive economic provisions.

“That’s what we’ve been saying, otherwise you may create more uncertainty because… at least the economic provisions you know what’s in there,” he said.

Balisacan noted that the Philippines needs investments to make sure there is competition.

“We need investments to make sure that there’s much more competition in the economy, need to put competitive pressure into the economy so that efficiency, quality of goods and services will improve, prices are contained to competitive levels. That’s what we don’t get if you have so much concentration of production in just a few hands so foreign competition… getting them to come in, they provide extra, and they also bring in new technologies, new ways of doing things, we need those kinds of externalities in the economy,” he said.

In a separate statement, Balisacan said amendments removing the restrictive economic provisions will provide a more fertile ground for both local and foreign investments, thereby fostering greater economic growth and development.

“It is necessary to address and remove these restrictions, but it is also important to note that apart from eliminating those barriers, it is imperative to address the ease of doing business, high cost of certain inputs like energy, and the predictability of our policies, regulatory or otherwise,” he said.

The amendments, he added, would make the Philippines more attractive to foreign investments and more adaptable in the global economic landscape.

“I commend the ongoing efforts of both the Senate and the House of Representatives in addressing these constitutional amendments. I believe that these discussions are being conducted with the nation’s best interests in mind and with a shared goal of economic progress and stability,” he said.

“It is crucial to highlight that, while supportive of these amendments, I also advocate for a balanced approach. This includes maintaining certain protections, such as the stance against full foreign ownership of land, as articulated by President Marcos.”