The expansion of the Philippine economy is anticipated to accelerate in the latter half of the year, largely due to a projected resurgence in government expenditures following the election-related prohibition, Budget Secretary Amenah F. Pangandaman stated.
“I remain hopeful. I believe it will reach 6% [in the second half],” Ms. Pangandaman conveyed to journalists during a Department of Budget and Management (DBM) event on Wednesday.
This projection hinges on the speed of public spending post the electoral ban on infrastructure projects, she mentioned. The 45-day prohibition commenced on March 28 and concluded with the elections on May 12.
“Our first semester results are merely touching the lower boundary of this program, so we must be experiencing growth of 6% or greater in the latter half,” Budget Assistant Secretary Romeo Matthew T. Balanquit informed BusinessWorld.
The gross domestic product (GDP) expanded by 5.5% in the second quarter, which was slightly quicker than the 5.4% recorded in the first quarter but slower than the 6.5% from the same period last year.
For the first half, GDP growth averaged 5.4%, lagging behind the 6.2% recorded a year prior.
Economy Secretary Arsenio M. Balisacan previously stated that GDP needs to increase by 5.6% throughout the remainder of the year to meet the lower end of the annual target.
“Better than the 5.5% in the third quarter. Improved because we resumed operations. We released the NCA (Notice of Cash Allocation). You can observe that agencies have started procurement once more,” Ms. Pangandaman remarked.
The most recent disbursement report from DBM indicated that government expenditures rose by 21.2% to P578.2 billion in May. This marked a reversal from the 27.8% annual decline experienced in April due to the election ban on public works disbursements.
The budget department has instructed government agencies to provide their “catch-up plans” to enhance spending for the remainder of the year.
“They are currently submitting proposals to streamline the programs and agency projects. But yes, we’ll receive their catch-up plans shortly and then make them public,” she stated.
When inquired if she anticipates adjustments to the 5.5% to 6.5% growth forecast for this year, Ms. Pangandaman, who leads the Development Budget Coordination Committee (DBCC), replied: “Not at this moment.”
The second gathering of economic leaders for this year is expected to be held at the end of September, she noted.
The DBCC modified macroeconomic projections in July to represent a “more cautious and resilient perspective amid global challenges.”
However, Ateneo Center for Economic Research and Development Director Ser Percival K. Peña-Reyes commented that simply increasing spending might not suffice to elevate growth beyond 6% for the latter half.
“Our projection is below 6%,” he stated in a Viber message, highlighting external uncertainties such as the US tariffs.
Last month, Mr. Trump implemented a 19% duty on the Philippines, effective August 7.
The updated rate is marginally lower than the 20% that the US had threatened to impose but higher than the 17% tariff announced during the “Liberation Day” in April.
Mr. Peña-Reyes also pointed out the decline in approvals for foreign investment commitments, which fell by 64.4% to P67.38 billion in the second quarter, down from the revised P189.5 billion during the same timeframe last year. – Aubrey Rose A. Inosante
