FINANCE Secretary Benjamin E. Diokno remains confident that the country would still achieve a 6-percent full-year economic expansion this year on the back of an anticipated ramped-up government spending despite a tepid second quarter GDP growth.
Diokno emphasized that an “aggressive” catch-up plan for government infrastructure projects coupled with “deliberate spending” by government agencies are “essential” in helping the country’s economy meet the 6 percent to 7 percent growth target for 2023.
“The Philippine economy has to grow by 6.6 percent in the second half of the year to achieve the lower end of the 6 to 7 percent growth target for 2023,” he said in a statement on Sunday.
“While there are formidable external challenges, the prospect for achieving this lofty goal is largely in the hands of the current administration,” Diokno said.
Diokno noted the 7.1-percent contraction in the government’s final consumption expenditure, which was the lowest since the first quarter of 2011 when it declined by 15 percent.
Nonetheless, Diokno explained that countries that depend on exports are more vulnerable to the impact of a slowing global economy.
“The Philippines is not as export-dependent as some of its Asean neighbors,” he said.
“It’s growth is consumption-based. That is why it is less susceptible to the weaker exports demand owing to the slowing global economy which is partly due to the aggressive monetary tightening, supply bottlenecks and rising commodity prices resulting from the ongoing Russian invasion of Ukraine,” he explained.
He emphasized that the “more dependent” the country is on experts, the “slower” its economic expansion would be because of a “slowing global economy.”
Socioeconomic Planning Secretary Arsenio M. Balisacan earlier disclosed that the economic team is “committed” to accelerate government spending for the rest of the year “to facilitate the recovery of the country’s growth momentum.”
“To do this, we will accelerate the execution of government programs and projects, including the delivery of public services, under the 2023 national budget,” the economic managers said in their joint statement.
The Department of Budget and Management (DBM) has given state agencies and corporations five weeks to submit their catch-up plans to accelerate spending and address government’s “underperforming” expenditure level as the economy shows signs of slowing down. (Related story: https://businessmirror.com.ph/2023/08/11/government-units-firms-told-to-hasten-spending/)
During the budget briefing of the House of Representatives’ Development Budget Coordination Committee last Thursday, DBM Secretary Amenah F. Pangandaman said the obligation rate of the entire national government as of end-March stood at 30.5 percent.