Budget chief sees 6% GDP growth in second half

Philippine economic growth seen to pick in the second semester, amid an expected rebound in government spending following the election-tied ban, Budget Secretary Amenah F. Pangandaman said.

“Hopefully. I think it’s 6% [in the second semester],” Ms. Pangandaman told reporters on the sidelines of a Department of Budget and Management (DBM) event on Wednesday.

This forecast depends on the pace of public expenditures after the election ban on public works, she said. The 45-day ban started on March 28 and ended with the May 12 elections.

“Our first semester performance is just hitting the low-end of this program, so we must be growing 6% or higher in the second half,” Budget Assistant Secretary Romeo Matthew T. Balanquit told BusinessWorld.

The gross domestic product (GDP) grew by 5.5% in the second quarter, slightly faster than the 5.4% print in the first quarter but slower than the 6.5% a year ago.

For the first half, GDP growth averaged 5.4%, slower than the 6.2% a year ago.

Economy Secretary Arsenio M. Balisacan earlier said GDP must grow by 5.6% for the rest of the year to achieve the low end of the full-year target.

“Better than the 5.5% in the third quarter. Better because we started again. We released the NCA (Notice of Cash Allocation). You can see agencies began procuring again,” Ms. Pangandaman said.

Latest disbursement report from DBM showed government spending increased by 21.2% to PHP 578.2 billion in May. This was a turnaround from the 27.8% annual contraction in April due to the election ban on public works spending.

The budget department has ordered government agencies to submit their “catch-up plans” to bolster spending for the rest of year.

“They are already submitting submissions to direct the programs and the agency projects. But yes, we’ll get their catch-up plans soon and then we’ll release it to the public,” she said.

Asked if she expects revisions to the 5.5% to 6.5% growth outlook this year, Ms. Pangandaman, who chairs the Development Budget Coordination Committee (DBCC), said: “Not yet.”

The second meeting of the economic managers for this year will likely be scheduled in the end of September, she said.

The DBCC revised macroeconomic assumptions in July to reflect a “more measured and resilient outlook amid global headwinds.”

However, Ateneo Center for Economic Research and Development Director Ser Percival K. Peña-Reyes said faster spending alone may not be enough to lift growth beyond 6% for the second half.

“Our forecast is below 6%,” he said in a Viber message, noting external risks such as uncertainty in the US tariffs.

Mr. Trump last month imposed a 19% duty on the Philippines, which took effect on Aug. 7.
The new rate is slightly lower than the 20% the US had threatened to impose, but higher than the 17% tariff announced during the “Liberation Day” in April.

Mr. Peña-Reyes also noted the lower approvals in foreign investment commitments, which plunged by 64.4% to PHP 67.38 billion in the second quarter, down from the revised PHP 189.5 billion in same period last year. – Aubrey Rose A. Inosante