DUE to government underspending and the current state of the global economy, state-owned think tank, the Philippine Institute for Development Studies (PIDS), does not expect the country’s economic growth to hit the government’s growth targets this year and next year.

The national government aims to hit a growth of 7 percent to 8 percent during the term of President Aquino. However, PIDS President Josef T. Yap expects this year’s gross domestic product (GDP) growth to be below 5 percent and next year’s at only 5.5 percent.

“My best guess now is it will be 5.5 percent [next year]. Mahirap ’yung 7 [percent]. Parang momentum ’yan, you have to build it. So maybe 2013. Ang kailangan natin is a jump to a virtuous cycle. Once you get into that virtuous cycle, tuloy-tuloy na yan. [I expect growth to be] below 5 percent for 2011, maybe 4.8 [percent], thereabouts,” Yap told reporters at the sidelines of the Communication and News Exchange Forum in Quezon City on Thursday.

Yap said the government’s underspending in the first two quarters of the year and the recent typhoon—with damages already around P1 billion­—will likely affect economic growth in the second half of the year, especially the third quarter.

He added that this low-growth period is likely to continue in 2012 because of the uncertainty in the global economy and especially the government’s low spending. Yap said this stalled many of its projects, particularly those aimed to be funded under public-private partnership (PPP) scheme.

Yap said the government’s underspending was very significant that it was lower than what was programmed and the actual spending made in the previous year. This lead to a very disappointing 3.4-percent GDP growth in the second quarter.

“[The growth of] 3.4 percent was really disappointing for me. Mababa ’yun. I was hoping that with the new administration, businessmen will come in and really put their money [into the economy] but our investment rate hardly moved,” Yap said.

The government’s mistakes and the weak global economy are not helping the country’s efforts in recovering not one but two lost decades of economic growth.

Quoting World Bank data, Yap also said it was not true that the Philippines had a lost decade. Based on his analysis, the country even lost two decades. He explained that after the country’s per capita income peaked in 1982, the next high was recorded in 2002, resulting in 20 long years of economic stagnation.

Yap said while the country was able to recover some of the lost economic opportunities between 1982 and 2002, more needs to be done. He said addressing development constraints must be the focus of the Aquino administration. These constraints include low investment rate which is only at 20.4 percent in the first half of 2011; inadequate infrastructure particularly in energy and transportation; and weak institutions.