Sees 7% possible in 2016
Recognizing the impact of the first-quarter and first- half slowdown in the economy on the government’s full-year growth target, the National Economic and Development Authority (NEDA) on Wednesday said it has revised its growth projection for 2015 down to 6 percent from 7 percent.
The goal of stepping up growth to 7 percent looks more achievable in 2016, NEDA Director General Arsenio Balisacan said.
“As advanced economies are expected to recover next year, growth can accelerate toward 7 percent next year,” Balisacan, who is also the country’s socioeconomic planning secretary, said in a speech at the Philippine Economic Briefing in Pasay City.
In the first half of 2015, the economy grew by 5.3 percent or below the government target of 7 percent to 8 percent for the full year.
The National Economic and Development (NEDA) continues to hope that the economy will register 6 percent growth by yearend, said Balisacan, who is also the NEDA director general.
“Admittedly, this falls short of the original official target for this year. We, at NEDA, believe that the economy can still reach 6 percent real GDP growth in 2015,” he said.
Prospects for the Philippine economy are looking bright in terms of the investments in human capital and infrastructure and commitment to good governance and good economics.
Balisacan said that the country’s investments in infrastructure and human capital will support economic growth in the medium-term.
“Our aim is to increase investments in public infrastructure from 2 percent of GDP in 2012 to at least 5.0 percent by 2016,” he said.
A total of 12 infrastructure projects worth P285 billion or 2 percent of the GDP are being implemented. Thirteen projects worth P514 billion or 4 percent of the GDP are in the procurement process.
Quality education and poverty alleviation programs accompanied by catalysts that encourage innovation, entrepreneurship and private investments are enabling factors for long-term growth, Balisacan noted.
The NEDA chief said the macroeconomic competitiveness can be improved by closing the infrastructure gap. “Infrastructure capacity needs to be continuously upgraded to support current and future growth.”
High levels of public investments in human capital, particularly in health and education, must be maintained. “We need to ensure the availability of a healthy, highly trainable and skilled labor force and we need to produce more innovators and entrepreneurs,” Balisacan said.
“If we get it right this time, sustained GDP growth of about 7 percent yearly could bring us to higher middle-income economy status by the end of the next administration,” he added.