Socioeconomic Planning Secretary Arsenio Balisacan said that the government is expected to overspend next year to make up for underspending that constrained growth this year.
The National Economic and Development Authority (NEDA) director general said that government spending will be one of the main drivers of growth next year.
Government consumption and public construction fell 1.6 percent year-on-year in the nine-months to September, dragging the average Philippine gross domestic product growth during the period to 5.8 percent or below the government’s target of at least 6.5 percent.
“The expectation is that next year, there will be overspending. Government spending will be a major contributor to growth next year,” Balisacan, said.
For 2015, the government will continue to implement measures to enhance revenue generation, regulatory efficiency, improve the links between planning, investment programming and budgeting, and build capabilities on planning, investment programming, budgeting and budget execution, he added.
“Moving into 2015, we know that we need to work even harder to sustain economic growth over the short term,” he said.
Balisacan pointed out that the government’s wider fiscal space brought by the country’s continuous rise in competitiveness ranking and investment grade ratings should allow the faster implementation of infrastructure projects, particularly those that will address transport and logistical challenges to facilitate movement of people and goods.
On the other hand, the Cabinet official said that the P2.606-trillion budget for 2015 is consistent with the sectoral and spatial strategies indicated in the Philippine Development Plan Midterm Update.
Balisacan also stressed that agri-business, manufacturing, construction, information technology-business process outsourcing in the Next Wave Cities, logistics and tourism have been identified as priority sectors based on their potential for rapid growth and/or massive generation of quality employment.
The objective is to improve competitiveness in the production sectors while ensuring that there is ample supply of the needed skills, he said.
“As I’ve mentioned many times before, the Philippine economy should consistently grow at a rapid pace over a longer period of time in order to effectively solve the poverty problem. Moreover, we need to be mindful that there are no quick fixes for long-standing problems; they require long-lasting solutions. The challenges we face are complex and thus require a high degree of cooperation and coordination within government and among development partners, private sector and citizens,” the secretary concluded.