Government reforms and the 2016 elections are expected to ramp up public spending in the second quarter of 2015, an investment bank said.
Fiscal spending will recover strongly in the second quarter in line with signals from the government and the central bank, UK-based bank Barclays said in a quarterly report.
In the first quarter of the year, fiscal spending slowed to 4.8 percent year-on-year compared with 9.4 percent.
Besides the P2.6 trillion national budget for 2015, the bank emphasized an estimated P468 billion carried over from 2013 and 2014 that can be spent on the Typhoon Yolanda rehabilitation, public-private partnership (PPP) projects and other priority projects of the government.
Barclays also raved about the effort to establish a delivery unit to accelerate the disbursements in the remaining three quarters of 2015.
The Department of Budget and Management recently released the guidelines for the full-time delivery units (FDUs), a measure meant to ensure the proper implementation of priority programs or projects that need close monitoring to boost public spending and speed up project execution.
All government agencies and departments were directed to facilitate the prompt implementation of their programs and projects via the FDUs.
These FDUs are supposed to help agencies meet the respective timelines and targets for each project, as well as improve the capacity to fully utilize their budgets.
“With the government running a small budget surplus over the past three quarters, there is certainly ample room to boost spending by even more than currently projected, if needed,” Barclays said.
At the same time, the bank said one incentive to boost spending will be the presidential election in May 2016.
“The elections will be keenly watched by investors, as a primary issue is continuity of the improvement in recent years of the country’s growth and credit metrics,” Barclays added.