Infrastructure seen to push GDP growth to 7%

MANILA, Philippines — The Philippines is set to achieve a faster economic growth of close to seven percent due to the government’s massive infrastructure build up under the Build Build Build program, Standard Chartered Bank said.

In the bank’s Global Focus Q3 2018 report, Stanchart economist for Asia Chidu Narayanan said the implementation of various infrastructure projects puts upside risks on its gross domestic product (GDP) growth forecast of 6.7 percent for the Philippines this year.

He said “fuller implementation of planned projects could push growth close to seven percent.”

“Infrastructure activity was much higher in Q1-2018 than in the same period last year, but slowed mildly from Q4-2017; we expect the pace to pick up. Operational issues at the district level and bureaucratic red tape persist,” Narayanan added.

According to the economist, the Department of Budget and Management (DBM) forecasts infrastructure spending to hit 6.3 percent of GDP in 2018 from an average of 2.7 percent from 2011 to 2015.

Latest data showed infrastructure spending grew to four percent of GDP in the first quarter.

 The Duterte administration has committed to spend at least P8.4 trillion to ramp up infrastructure spending until 2022.

The Philippines has booked 77 quarters of uninterrupted growth as the GDP growth accelerated to 6.8 percent in the first quarter  from the revised 6.5 percent in the fourth quarter of last year.

Economic managers through the Cabinet-level Development Budget Coordination Committee (DBCC) have forecast a GDP growth of between seven and eight percent this year from 6.7 percent last year.