ELECTION and infrastructure-related spending are expected to boost the country’s gross domestic product (GDP) growth to above 5.2 percent in the first quarter of 2016, according to the National Economic and Development Authority (Neda).
Socioeconomic Planning Secretary Emmanuel F. Esguerra told reporters on Tuesday that the first- quarter growth in 2015 will be exceeded this year.
“Certainly, [GDP for this year will exceed 2015 first quarter growth]. Parang ang dali mong ma-exceed ’yung 5.2 percent,” Esguerra said.
He added: “It is a given. 2016 is an election year. Whether you like it or not, there is that additional boost to spending whether we like it or not.”
Esguerra said election spending can contribute at least 0.5 percent to as much as 1 percent of GDP. But regardless of the exact amount it contributes, it will play a role in boosting GDP growth this year.
Increased spending, whether through elections or infrastructure, can have a significant impact on the country’s GDP since the Philippines is a consumption-driven economy.
Consumption in the Philippines explains around 60 percent to 70 percent of the country’s economic growth and performance.
“Siyempre kasi may multiplier effects ’yun, there will be people who will get some income because of [elections] and there will be spending so that adds to the ‘C’ component of your national income accounts,” Esguerra said.
The ‘C’ component that Esguerra said is consumption, which is part of the formula for computing GDP. GDP is the sum total of goods and services produced in a country at a given period of time.
The impact of the elections and infrastructure spending on GDP will still be significant despite the negative impact of El Niño on the agriculture sector.
Esguerra said that part of this is the early implementation of the Roadmap for Addressing the Impact of El Niño (RAIN).
The RAIN aims to ensure food security by increasing the supply of food, keeping food prices stable and implementing measures to protect farmers’ incomes.