Cabinet execs expect improved Q4 growth


The economy likely performed better in the last three months of 2015 based on preliminary indicators, Cabinet officials said.

They declined to provide estimates, however, ahead of the official release of fourth quarter and full year data on January 28.

Gross domestic product (GDP) growth picked up to 6 percent in the third quarter of last year, bringing the year to date expansion to 5.6 percent, after a disappointing first half blamed in part on government underspending.

The government has a 7 percent to 8 percent target for the year and officials have admitted that 2015 growth will likely come in at 6 percent.

Socioeconomic Planning Secretary Arsenio Balisacan said growth for the October-December period would have been boosted by improved factory output in November and robust domestic consumption, among others.

An improvement in government spending, meanwhile, would have provided additional support, Budget Secretary Florencio Abad said.

“I am hoping that [fourth-quarter growth] would be better than the third quarter,” said Balisacan, the National Economic and Development Authority (NEDA) director general.

The NEDA chief said improved factory output was a good indication of growth. On Tuesday, the Philippine Statistics Authority reported that manufacturing expanded both in terms of volume and value in November, by 7.5 percent and 1 percent respectively.

“It is not as high as I wanted it but its quite positive so that is a good indication and I think that the December MISSI (Monthly Integrated Survey of Selected Industries) will show a similar trend,” Balisacan told reporters on Tuesday at the sidelines of an energy policy conference.

“Of course consumption, with . . . low inflation, favorable employment conditions . . . exchange rate, plus the economic activity could help drive growth in the fourth quarter,” he added.

Inflation averaged to 1.4 percent in 2015, while unemployment rate slid to 6.3 percent from 6.8 percent a year ago.

In a separate interview, Abad said growth in the fourth quarter would definitely be better than the previous quarters based on how the government spent during the period.

“I think we are going to see about anywhere from 10 percent to a 16 percent increase in disbursement—that is highlighted by about a 13 percent increase in infrastructure spending—over the fourth quarter of 2014,” Abad told reporters later on Tuesday.

Government spending reached P535 billion in the fourth quarter of 2014. Of this, P80 billion was disbursed for infrastructure and capital outlays.

“[It] is a very small part of growth but if we were to depend on public spending [as a growth measure]then we can project … a robust [GDP] increase,” Abad said.

State spending hit P1.992 trillion as of November 2015, up 13 percent from the year-ago level.


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