Pernia: Recovery hinges on spending catch-up plan

MANILA, Philippines — The government’s growth target of between six percent to seven percent this year is still attainable with the catch-up spending plan laid out for infrastructure and programs, Socioeconomic Planning Secretary Ernesto Pernia said.

The Cabinet-level Economic Development Cluster (EDC) agreed on a strategy to accelerate spending to support economic growth, which faltered to a four-year low in the first quarter of the year as a result of the delayed passage of the national budget.

 “To reach our full-year growth target of six to seven percent, the economy will need to expand by an average of 6.1 percent over the next three quarters. This target is still within reach, should the private sector sustain its current performance and government be able to speed up the implementation of its ongoing programs and projects, and jumpstart new ones,” Pernia said.

Actual government disbursement amounted to P778 billion in the first quarter of 2019. In order to hit the full-year disbursement program of P3.774 trillion, the government must spend P2.996 trillion from the second to fourth quarters of the year.

Disbursements for infrastructure, meanwhile, amounted to P207.2 billion in the first quarter. To reach the infrastructure spending target of P1 trillion for the year, government must disburse P792.97 billion for infrastructure from the second to fourth quarters.

The Department of Public Works and Highways (DPWH) and the Department of Transportation (DOTr) have so far made a combined spending commitment of P803.1 billion for the next three quarters of the year, making up nearly all of the infrastructure spending target for the year.

Pernia said infrastructure disbursements from other agencies can further drive spending growth through the Armed Forces of the Philippines (AFP) Modernization Program of the Department of National Defense; the school-building program of the Department of Education; and the Health Facilities Enhancement Program of the Department of Health.

The government, he said, will also fasttrack the implementation of priority programs such as the National ID System, the Pantawid Pamilyang Pilipino Program, unconditional cash transfers and fuel marking program.

Pernia noted earlier, however, that while the government seeks to catch up on programmed spending, this must be done deliberately so as not to waste resources and bring about the best results.

Even as it is important to ramp up government spending to support the economy, he cautioned that the government must also be mindful of the limitations.

“Catching up also has limits. Even before projects can start, there are things that have to be ironed out first,” said Pernia. “There is a saying that you have to make haste slowly.”