The country’s GDP likely expanded by 6.4 percent in the second quarter, slower than the 7.1 percent recorded in the same period last year, due to the absence of election spending, according to the National Economic and Development Authority (Neda).
Socioeconomic Planning Secretary Ernesto M. Pernia told reporters in a news briefing that GDP growth in the April-to-June period would be the same as the 6.4 percent recorded in the first quarter due to the so-called high base effects.
Pernia said candidates during the elections last year spent the bulk of their funds in the second quarter, allowing the economy to grow faster during the period.
“I have to be more conscious now because it’s after election year,” Pernia said. “I am being more modest this time on the forecast. Hopefully, growth in the second quarter could approximate the performance in first quarter.”
The Neda chief added manufacturing output and exports would boost GDP growth in the April-to- June period, as well as the government’s infrastructure spending.
Earlier, Neda Undersecretary for Planning and Policy Rosemarie G. Edillon told the BusinessMirror that the country is on track to meet its target, after the World Bank said it slashed its growth estimate for the Philippines to 6.8 percent, from 6.9 percent.
“The target growth rate is still 6.5 percent to 7.5 percent. So, the 6.8 percent is within target. On the underspending, all agencies are required to come up with a catch-up plan,” Edillon said. World Bank lead economist for the Philippines Birgit Hansl said in a statement that it is imperative for the government to support its infrastructure program to boost the economy.
Based on data released by the Department of Budget and Management in May, public spending on infrastructure declined by 2.5 percent to P142.1 billion in the first quarter of 2017.
The World Bank said it still expects private consumption and export earnings to be robust this year. The World Bank added consumption is forecast to grow at 5.6 percent in 2017 and 6.1 percent in 2018. This is, however, slower than the 7.2 percent in 2016.
Growth of private consumption is expected to be fueled by the increase in overseas Filipino worker remittances in the medium term.
Flagship projects
Pernia said the government has set its sights on rolling out more flagship projects to boost economic growth. However, the bulk of the Duterte administration’s flagship projects are still pending at the interagency Investment Coordination Committee (ICC) for review and the Neda for approval
Data released by the Neda showed that only 18 of the 75 flagship projects have been approved by the President for implementation. These approved projects have a price tag of P462.74 billion. There are two projects that are pending for Neda Board approval worth P285 billion. These are the P151 billion worth Philippine National Railway (PNR) Long-haul from Calamba to Bicol and P134 billion worth PNR South Commuter Line from Tutuban to Los Baños.
Of the 75 flagship projects, some 55 projects are still pending at the ICC. But only 33 projects have cost estimates, which amounted to P831.44 billion, while the remaining 22 projects still do not have cost estimates as of press time.
The projects pending with the ICC that have the highest costs are the P230 billion worth Manila Metro Line 9 under the Mega Manila Subway Project-Phase 1 followed by the P72.06 billion worth Bohol-Leyte Link Bridge, which is included in the Nationwide Island Provinces Link Bridges.
Other big-ticket flagship projects with cost estimates are P57.65 billion worth Luzon-Samar Link Bridge under the Nationwide Island Provinces Link Bridges program and the P57.6 billion worth Clark-Subic Railway project.
Among the flagship projects approved by the President, the one with the highest cost is the P211.46 billion worth PNR North 2, or the Malolos-Clark Airport-Clark Green City Railway project.