Budget and Management Secretary Benjamin Diokno is optimistic of a 6.9 percent growth of the economy this year following the sustained expansion in the third quarter.
“Maybe a 6.9 percent full year growth is attainable,” he said in a briefing Wednesday.
The government's 2017 growth target for this year is between 6.5-7.5 percent.
Diokno identified government spending as among the main drivers of domestic growth in the remaining months of the year.
He said implementation of infrastructure projects, request for payments by contractors and disbursement of government employees’ year-end bonus would boost expenditures in the last two months this year.
In the third quarter this year, domestic growth, as measured by gross domestic product (GDP), exceeded expectations because of improvement in government disbursement and strong government consumption, among others, he said.
Diokno said government spending on infrastructure is targeted to increase to 5.4 percent of GDP in 2017 up to 7.3 percent of GDP by 2022.
“To give you some perspective for the last 50 years we have only spent 2.6 percent of our GDP for infrastructure that’s why you’ve been complaining about poor roads,” he said.
In the third quarter alone, government 's final consumption expenditure rose 8.3 percent, higher than the 3.1 percent growth same period in 2016 and the 7.1 percent rise in the second quarter this year.
Diokno attributed the higher state spending from July to August this year to increased spending on personnel services, which rose 13.9 percent, due to higher base pay of civilian workers and higher allowances of military and uniformed personnel.
Disbursements for maintenance and operations during the same period improved by 8.2 percent due to increased spending on education, healthcare, and social protection programs, he said.
The government intends to spend at least P8 trillion on infrastructure projects until 2022 and this, Diokno said, would ensure the sustained growth of the domestic economy.
The National Economic and Development Authority (NEDA) Board has, thus far, approved 23 of the proposed 75 infrastructure projects of the Duterte administration.
NEDA data show that of the 23 approved projects, 14 will be completed by the end of the current administration’s term.
Diokno is confident that all the proposed projects will be approved by the NEDA Board and most will be completed before the end of the Duterte administration.
He said one of the projects expected not to be finished within the Duterte administration is the proposed subway line from Quezon City to Taguig City, which is expected to be finished by 2025.
He said signing for the project is set for the first quarter of 2018, with the design and implementation to be given to the future winning bidder.
Traffic is expected to be hard during the project’s construction but Diokno said people need to sacrifice a bit.
“To me that’s just the start. That’s phase one. Their plan is to leave their equipment here after they finished the project,” he said, citing that these equipment could be used by the government for its other projects.
Another expenditure booster next year is the scheduled increase of state workers’ pay, which under the proposed 2018 budget has been allocated P24 billion.
The salary hike is the third tranche under the Salary Standardization Law (SSL). The last tranche will be in 2019.
- Published in Business