Economic officials believe that GDP growth in the fourth quarter would be higher than the 6-percent growth in the previous quarter due to higher government spending that will persist up to the first few months of next year, especially in infrastructure.
Budget Secretary Florencio B. Abad said public spending during the last quarter of the year will again pick up as in the previous years, as government offices scramble to finish their projects.
This will drive growth higher than 6 percent, which was recorded in the third quarter.
Abad said 96 percent of the agency budgets have already been released.
“As in the third quarter, public spending will once again play a pivotal role in the economic expansion in the fourth quarter [Q4]. Historically, Q4 has always been a strong quarter in terms of public spending, as agencies rush to finish their projects. Because of the reforms introduced, like the elimination of the need for Saros [special allotment release order], the significant reduction of lump sums, and the advance procurement of goods and services, the Department of Budget and Management is certain to match its yearly average of 98-percent releases,” Abad said.
Abad added that elective officials are also expected to finish their infrastructure projects to gain popularity among their constituents ahead of the coming elections.
“What will further boost spending is the pressure to finish infrastructure projects from political leaders in the run-up to the May 2016 elections. Performance is always an election platform and political leaders demonstrate that through the delivery of social services and public-works projects,” he said.
Finance Secretary Cesar V. Purisima said infrastructure spending by the government would have already reached the target of 5 percent of GDP by 2016, as the 2016 national budget had increased allocation for infrastructure spending to fuel growth.
“We believe our investments in infrastructure and our people are creating a web of growth drivers, setting the stage for higher-quality growth. With the 2016 budget, we will meet our 5 percent of GDP goal for infrastructure spending. Meanwhile, budgets for social services went up by 471 percent, basic education by 79 percent, health by 211 percent since 2010,” he said in a statement.