MANILA, Philippines - Faster public spending should further help boost the economy in the second half of the year, the Department of Finance said, adding it has ample fiscal space for activities that will sustain domestic growth.
Finance Secretary Cesar Purisima made the comment yesterday after the announcement of the country’s second quarter economic growth which settled at 5.6 percent, up from the revised five percent in the first three months of the year.
“The Philippines continues to be driven by robust domestic demand, propelled by household consumption… and improved expenditure performance,” Purisima said.
“We expect public spending to play a bigger role in second semester performance as we have ample fiscal space in the P2.6-trillion 2015 budget to fund growth-inducing investments,” he said.
The government’s inability to accelerate spending has been blamed for the lackluster five-percent expansion in the first quarter of the year.
In the second quarter of the year, expenditures went up 12.4 percent to P567.9 billion from P505.2 billion in the same period last year but still below the program.
However, the Department of Budget and Management earlier said disbursements should continue increasing for the rest of 2015 as local officials hasten the completion of projects before the election ban early next year.
The second quarter growth figures brought the first-half GDP to 5.3 percent, slower than the 6.2 percent seen in the same period last year but still among the highest in Asia.
“The Philippines’ resilience continues to differentiate the country as a bedrock of stability in the region as we push on with brighter prospects,” Purisima said, noting China’s slowdown has little effect on the Philippine economy.
At the same time, Purisima cited growth drivers such as remittances from overseas Filipino workers and the revenues from the business process outsourcing sector which have been helping the economy sustain its growth.
“While we are presently anchored in the safe harbor of improving governance, reliable domestic consumption and remittances, improved fiscal health and stable macroeconomic environment, we cannot stay still as our journey to a more inclusive and competitive Philippines is not yet complete,” Purisima said.
“We will work harder in pursuing the course of reform the President has charted 5 years ago,” he added.
The government expects to grow the economy by seven to eight percent this year from the 6.1 percent expansion in 2014.