Singapore-based banking giant DBS said the successor to the Aquino administration should continue to focus on the improvement of the government’s fiscal performance to sustain at least 6 percent annual gross domestic product (GDP) growth for the Philippines.
In a report, DBS said that the economic visions of all the presidential candidates appear to run along a similar pro-growth and pro-poor line.
“We reckon that near-term impact from the change in government will be fairly limited,” it said.
Nevertheless, the banking giant said beyond this year, one aspect to closely monitor is public finance under the next government.
“The Aquino administration has a good track record on tax collection but has often underperformed in its fiscal disbursement,” it said.
In particular, the Department of Finance data showed that the national government incurred a budget deficit of P3.474 billion in January this year, 46 percent narrower from a year earlier as growth in revenue outpaced that of government spending.
Expenditures amounted to P185.7 billion while revenues reached P182.23 billion, compared with P173.12 billion and P166.65 billion, respectively, in the same period a year earlier.
Revenues were 9 percent higher at P182.23 billion in January from P166.65 billion a year earlier, while disbursements expanded by 7 percent in January to P185.7 billion from P173.12 billion a year earlier.
The national government approved a P3-trillion budget this year, of which 83.5 percent or P2.5 trillion has already been released to agencies, according to the Department of Budget and Management.
The banking giant has a 6.1-percent GDP growth outlook for the Philippine economy this year, higher than the 5.8 percent result last year but below the government’s official 6.8 percent to 7.8-percent target.