Full-year economic growth could come in just below 7 percent given better-than-expected third quarter results, a Cabinet official said on Wednesday.
“I would say that maybe a 6.9 percent full-year growth rate is attainable,” Budget Secretary Benjamin Diokno said in a press briefing in Manila.
Third quarter growth of 6.9 percent surpassed expectations of a 6.6 expansion at most. Results for the second quarter were also revised upwards and year-to-date growth, at 6.7 percent, kept the country on track to hitting the 6.5 percent to 7.5 percent target for 2017.
If correct, Diokno’s forecast would match the 6.9 percent result posted in 2016.
Growth drivers that allowed the Philippine economy to beat market expectations, he said, were robust government disbursements, strong government consumption and the ambitious “Build Build Build” infrastructure program.
On the demand side, the government’s final consumption expenditure rose by 8.3 percent, higher than the 3.1 percent posted in the third quarter of 2016 and the 7.1 percent seen in the second quarter of this year.
In effect, government spending accounted for 0.9 percentage points of the 6.9 percent growth rate in the third quarter, Diokno said.
He added that the data also indicated that the “Build Build Build” program was well underway.
Infrastructure and other capital outlays reached P142.1 billion, exceeding the P137.8 billion programmed for the third quarter and rising by 15.4 percent year-on-year.
“The economic expansion and growth in government spending is laudable, especially for a post-election year,” Diokno claimed.
This can be attributed to expansionary fiscal policy and more efficient utilization of resources, he added.
“Looking ahead, the Department of Budget and Management will ensure that government spending will provide a much-needed boost to economic development,” the Budget chief said.
Fourth quarter expenditure growth, he said, would remain driven by infrastructure and capital spending by implementing agencies, plus personnel services owing to the release of year-end bonuses and higher maintenance and operating expenditures for social protection programs.
“Rest assured that we will exert all efforts to meet our fourth quarter targets, and ultimately, our P2.909 trillion disbursement target for FY 2017,” Diokno said.