Philippines unlikely to hit top end of growth target – Pernia

MANILA, Philippines — The Philippines is unlikely to hit the upper limit of economic growth target for 2017, the National Economic and Development Authority (NEDA) said.

In an interview, Socioeconomic Planning Secretary Ernesto Pernia said the economy would not be able to expand at 7.5 percent this year, the top end of the government’s 6.5 percent to 7.5 percent gross domestic product (GDP) growth target.

“Not this year. It will take a miracle to reach 7.5 percent at this point,” Pernia told reporters on the sidelines of a Senate committee on finance hearing.

But Pernia said the government remains bullish it would be able to hit at least the middle range of the growth target.

“I think if we hit close to the mid-range, we’ll be happy with that, higher or lower than the mid-range,” Pernia said.

The economy grew 6.4 percent and 6.5 percent in the first and second quarter, respectively.

For the second quarter of 2017 alone, growth was driven by the agriculture sector, which expanded 6.18 percent during the period, and government spending, which went up 5.6 percent.

For the third quarter, Pernia said the government is hoping for an improvement from the first quarter and second quarter figures, but said it would be difficult to achieve a seven percent growth, or the middle range of the 6.5 to 7.5 percent growth target.

“It might be difficult (to hit the mid-range) because it will require something like 7.5 percent, even higher. I want to be upbeat but I don’t want to say that we are likely to reach the middle of the range,” Pernia said.

According to Pernia, economic growth during the third quarter would be driven by exports, as well as infrastructure spending.

“I think the external economy is favorable, in terms of our exports. The spending on infrastructure is going to escalate over the next three months, especially in 2018,” he said.

In July, total exports rose 10.4 percent to $5.28 billion from $4.79 billion in the same month last year.

Total imports, meanwhile, decreased 3.2 percent to $7.16 billion. This narrowed down the country’s trade deficit to $1.65 billion in July from $2.37 billion a year ago.

Meanwhile, the government is planning to ramp up its spending in the third quarter, according to data from the Department of Budget and Management.

Based on the agency’s quarterly fiscal program, the government is targeting to spend P801.10 billion in the third quarter, 16 percent higher than the previous year’s P690.74 billion.