By Joann Santiago
MANILA, Sept. 22 (PNA) — A Palace official is not disturbed about the decision of the Manila-based Asian Development Bank’s (ADB) to cut its growth forecast for the Philippines this year.
ADB, in the update of its annual economic publication Asian Development Outlook released Tuesday, said it now sees a six percent growth for the domestic economy this year from 6.4 percent previously.
It attributed this decision to lower government spending in the early part of the year and impact of weakness in global economy.
However, the lender sees continued recovery in the rest of the year following an improvement in the second quarter, when growth, as measured by gross domestic product (GDP), posted an improvement to 5.6 percent from five percent in the first quarter.
With this, Presidential Communications Operations Office (PCOO) Secretary Herminio Coloma Jr. cited Socioeconomic Planning Secretary Arsenio Balisacan, who assured him that “NEDA (National Economic and Development Authority) is still hoping to attain a six to 6.5 percent growth (this year).”
“Cabinet has already committed to spend what is budgeted,” he told PNA in a text message.
The government’s growth target for this year is a range between seven to eight percent.
However, economic officials have admitted that attainment of the target was a challenge given the lower-than-programmed government spending in the first quarter of the year and the weakness in exports.
The first one was attributed to more stringent budget disbursement rules in line with government reforms while the latter was due to weakness in advanced economies.
Growth in the first quarter slowed to five percent from quarter-ago’s 6.1 percent due to the two factors.
Thus, the government ramped up spending the following quarter boosting growth to 5.6 percent.
As of last July, government expenditures rose 11 percent to Php 1.28 trillion from year-ago’s Php 1.16 trillion.
Last July alone, government spending surged by 25 percent, its fastest this year, to Php 210.7 billion against the Php 168.5 billion same month in 2014.
Economic managers were optimistic of the continued strong growth of expenditures since projects on the pipeline were not just those programmed for the year but also those set since two years ago. (PNA)