MANILA – Finance secretary Carlos Dominguez III said had Congress approved last year’s budget on time, domestic growth would have improved to as much as 6.8 percent from the previous year’s 6.2 percent.
“If the 2019 budget was passed on time and the National Government was able to replicate the 2018 growth in government consumption and government construction in 2019, the economy would have grown by an additional 0.9 percentage point or 6.8 percent instead of 5.9 percent,” he said.
Philippine full-year growth last year, as measured by gross domestic product (GDP), was lower than the government’s six to 6.5 percent target band.
The Philippine Statistics Authority (PSA) on Thursday also reported that growth in the last quarter of 2019 grew by 6.4 percent, faster than the revised six-percent expansion in the previous quarter.
An economist of Rizal Commercial Banking Corporation (RCBC) said the 5.9-percent output in 2019 continues to show the economy’s resiliency despite the impact of the slowdown in the first half of the year due to the government’s budget approval delay and the global challenges.
In a message, RCBC chief economist Michael Ricafort said the domestic economy remains among the strongest in the region and even with the major economies around the world.
“It is worth noting that Philippine economic growth for 2019 at 5.9 percent is still considered decent and resilient, in view of external challenges/risk factors especially the global economic slowdown in 2019 largely brought about by the lingering United States-China trade war since July 2018,” he said.
For this year, Ricafort forecasts a 6.4 to 6.6 percent expansion for the domestic economy with the upper end of the projection within the government’s 6.5 to 7.5 percent target.
He identified government spending, especially on infrastructure, consumer spending, improvement in investment and capital formation, and optimism on the US-China trade pact as among the factors that would possibly drive growth.
“Faster government spending would be a major catalyst for faster Philippine economic/GDP growth in 2020, after the government underspending in the early part of 2019 slowed down GDP growth by about 100 basis points,” he added.
Ricafort said possible approval this year of the remaining tax reform measures, such as the Corporate Income Tax and Incentive Rationalization Act, will be a plus for domestic growth because this will address investors’ concerns and boost capital formation. (PNA)
