“Inspite of higher infrastructure spending the Duterte admin is still optimistic of at least 7% growth for the Philippine economy.”
Pernia said “higher infrastructure spending” likely took over in the third quarter. Andy Zapata Jr., file
MANILA, Philippines — The Duterte administration is optimistic economic growth hit “at least seven percent” in its first three months in office on the back of higher infrastructure spending.
“We hope it’s going to be at least seven percent,” Socioeconomic Planning Secretary Ernesto Pernia told reporters on Wednesday.
While election-related spending already tapered off, Pernia said “higher infrastructure spending” likely took over in the third quarter. He did not elaborate.
Gross domestic product (GDP), or the sum of all products and services created in an economy, expanded seven percent in the second quarter, the fastest in nearly three years.
It brought the first-half expansion under the previous administration to 6.9 percent.
Despite this, the Duterte administration decided to be conservative and cut the GDP growth target to between six percent to seven percent this year. Originally, it was at 6.8 to 7.8 percent.
Budget Secretary Benjamin Diokno reiterated higher spending plans are a go under the proposed P3.35-trillion budget for 2017, around P860 billion of which is allotted for infrastructure.
“The government is serious in pursuing a pro-growth fiscal policy,” he said at the Philippine Business Conference in Pasay City.
Pernia agreed, saying they intend to keep the economy “in good shape,” also to score another credit rating upgrade, which would lower debt servicing and free up more resources.
He, Diokno and Finance Secretary Carlos Dominguez are recently back from Washington D.C., where they met with debt watchers S&P Global Ratings, Fitch Ratings and Moody’s Investors Service.
This was after S&P warned of “policy uncertainty” under the current administration despite keeping the Philippines’ ‘BBB’ investment grade rating.
“We gave presentations…and they said they are going to maintain our investment grade. We convinced them that we will maintain the performance of the economy,” Pernia said.
“They said they could put the rating higher if there is an improvement,” he added.
As far as President Rodrigo Duterte’s tirades are concerned, Pernia said he relayed to the agencies that the chief executive is “just focused on stamping out crime and corruption.”
Pernia said the president “does not want to be distracted.”