‘2016 budget disbursement key to growth’

MANILA, Philippines - London-based international bank Standard Chartered Bank said the implementation of the 2016 proposed budget would be the key to driving and sustaining the country’s strong economic growth.

“Implementation remains key. President Aquino highlighted 46 percent of the shortfall in government disbursements was caused by structural weakness within key departments and agencies,” Jeff Ng, economist for Asia at Standard Chartered, said in a research note.

“However, we note the progress done over the past few years. International recognition on the Philippines enabled the country to be able to climb quickly in international rankings and gain investment grade. Further progress will depend on continued efforts on implementation,” he said.

President Aquino submitted yesterday to Congress the proposed P3.002-trillion national budget for 2016, up 15.2 percent from the 2015 enacted budget.

The government aims to collect P2.697 trillion in revenues next year and spend P3.006 trillion to spur economic growth.

The economy grew by a slower-than-expected 5.2 percent in the first quarter but the government kept its seven to eight percent target for the full year.

The dismal performance in the first three months of the year was blamed on public underspending, as expenditures came 13 percent short of what was programmed during the period.

Latest data showed government spending amounted to P835.7 billion from January to May, 21 percent below the P1.06-trillion target for the period.

“The 2016 budget remains consistent with previous years’ budget and provides a continued focus on medium-term development,” Ng said.

“The gradual reduction in public debt burden continues to free up more potential resources and spending on social and economic development,” he added.

More than a third or 36.8 percent of the proposed 2016 budget will go to social services such as education, healthcare, and social protection, while 27.6 percent has been allocated for economic services like transport infrastructure, agriculture, and tourism.