MANILA — Philippines’ low inflation environment and South East Asian (SEA) games-related spending are seen to help boost domestic growth and allow the economy to post a 6-percent expansion this 2019.
In a report Monday, ING Bank Manila senior economist Nicholas Mapa said as yearend nears the government will make sure to meet its deficit cap for the year by increasing expenditures to counter a slowdown in the first half of the year as a result of the budget delay.
Data released by the Bureau of the Treasury (BTr) Monday showed that government spending last October grew by 1.4 percent year-on-year, lower than the 39.1 percent last September.
In end-October 2019, government spending rose by 5.05 percent to PHP261.5 billion from year-ago’s PHP240.6 billion.
Revenues rose by 9.80 percent year-on-year to PHP2.358 billion while budget deficit fell by 20.51 percent to PHP348.3 billion.
Citing the government’s deficit cap of PHP438.1 billion, Mapa said that “with less than two months to the close of the eventful 2019, the Philippines zeroes in on its full-year deficit target with the economy in need of an added push post the budget delay.”
“We expect government spending to sustain the same strong pace to close out the year, which should translate to higher spending growth in both November and December given that government spending was in contraction by end 2018,” he said.
“State spending, coupled with revived capital formation (after BSP rate cuts) and robust consumption (low inflation and SEA games), will likely be enough to get the Philippine economy past the 6 percent finish line as we flip the calendar to 2020,” he added.
The government’s growth target for this year is a range between 6-7 percent.