MANILA, Philippines — The Philippine government should heighten spending to meet its economic growth target for this year, Finance Secretary Carlos Dominguez III said Monday, adding that infrastructure disbursements alone should hit P1 trillion to power growth.
At a Senate briefing, Dominguez said the state must spend around P2.996 trillion from the second to fourth quarters to achieve this year’s disbursement target.
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This was after lawmakers’ failure to pass the 2019 national budget on time and the election ban on public works froze new projects, weighing on economic growth in the first three months of the year.
READ: Reenacted budget saps economic growth in Q1
“In the first quarter of 2019, actual government disbursements amounted to P778 billion, barely rising from the 772 billion pesos in 2018,” Dominguez said.
“Infrastructure spending accounts for almost one-third of the amount of disbursements programmed for the said quarters. Actual infrastructure disbursements in the first quarter of this year amounted to 207.2 billion pesos,” he added.
“To reach our total infrastructure disbursement target of 1 trillion pesos for the entire year, the government must disburse around 792.97 billion pesos from the second to fourth quarters of the year,” he continued.
Gross domestic product — or the value of all finished goods and services produced in the country — expanded 5.6% in the first three months of 2019, slower than 6.3% in the previous quarter and 6.5% recorded in the comparable period last year.
The latest reading was the slowest since 5.1% registered in the first quarter of 2015 and settled below the state’s 6%-7% annual target for 2019.
Socioeconomic Planning Secretary Ernesto Pernia blamed the delay in passing the 2019 national budget for the economy’s disappointing performance in the first quarter. A spat among lawmakers stalled the approval of the new outlay, leaving fresh projects unfunded and crimping state spending, which accounts for a fifth of the country’s GDP.
The budget bill was signed into law in mid-April. Meanwhile, public works as well as hiring and movement of government workers were prohibited from March 29 to May 12 due to the May 13 midterm elections.
“Despite the delay of one full quarter in the execution of our 2019 fiscal program, we are doing our best to hurry up the execution of delayed projects,” Dominguez told senators.
“The members of the Economic Development Cluster held two meetings--the last one last Friday--to formulate a carefully crafted and bold expenditure catch-up plan to enable us to hit a GDP growth rate of above 6 percent this year,” he added.
“Key infrastructure agencies presented their updated spending plans for this year. This is to substantially offset the lower spending in the first quarter resulting from both the budget delay and the election ban on public works.” — Ian Nicolas Cigaral