THE President’s economic team is hoping the country’s GDP growth in the second quarter will reach 7 percent on account of the “Build, Build, Build” (BBB), according to the National Economic and Development Authority (Neda).
In a briefing on Monday, Socioeconomic Planning Secretary Ernesto M. Pernia told reporters the BBB will boost employment and incomes.
Higher incomes will both boost household spending. This is crucial for a consumption-driven economy like that of the Philippines.
“We certainly hope for a 7-percent growth because of the no underspending; and so much spending on the capital goods, on the Build, Build, Build program. There is a lot of activity. Not so many flagship projects have broken ground but we’re finishing so many from the previous administration and that’s why there’s so [much activity] in the infrastructure sector,” Pernia said.
Other growth drivers on the demand side include the completion of the government’s cash transfers, particularly the unconditional cash transfers (UCTs) and the Pantawid Pasada, which are directed toward workers and drivers affected by the Tax Reform for Acceleration and Inclusion (TRAIN).
In May the Neda said around 4 million Filipinos, all of whom are CCT recipients, received their P200 worth of UCT each. Another 6 million Filipinos are set to receive their UCTs soon.
The aim of the UCT is to augment the incomes of Filipinos belonging to the bottom 50 percent of the population. The computation of the transfer, Neda earlier said, was done using the impact of the TRAIN on incomes of the bottom 50 percent. The Pantawid Pasada is one of the mitigating measures under the new tax-reform law to ease the impact of the oil excise tax increases on commuters and the land transport sector.
The Department of Transportation (DOTr) and several congressmen said the Pantawid Pasada could extend a P5,000 worth subsidy to 179,852 legitimate PUJ franchise holders for the initial implementation of the program.
Apart from these, Pernia said other growth drivers include possible increases in investments on account of the revisions made in the Regular Foreign Investment Negative List (RFINL).
Based on Memorandum Order 16 released in November 2017, the Duterte administration aims to ease foreign restrictions in eight areas/activities.
The list includes private recruitment, whether for local or overseas employment; the practice of certain professions; public services such as transmission and distribution of electricity; the provisions of HB 4454; retail trade enterprises; and domestic market enterprise.
The list also includes easing foreign restrictions in construction and repair of locally funded public works. The Neda said once this is removed from the RFINL, foreign contractors can already operate in the Philippines.
On the supply side of the economy, Pernia said the agriculture sector is expected to see better production while the industry sector, particularly manufacturing, will benefit from recent technological innovations.
Further, the entry of the third telecommunication player will also benefit the industry and services sectors, particularly telecommunications.
With reports from Marc Dela Paz, BM Intern
Image credits: Nonie Reyes