By Chino S. Leyco
The momentum for higher economic growth will continue this year as the government began the implementation of the Duterte administration’s ambitious infrastructure programs, the Department of Finance (DOF) said Friday.
In its latest economic bulletin, the finance department said that the 6.8 percent economic expansion registered in the first-quarter of the year has set the country on its way to achieving its targets for high growth.
The Philippine Statistics Authority (PSA) reported that the country’s gross domestic product (GDP) grew at a much fastest pace in the first three-months of the year from 6.5 percent in the same period in 2017.
Finance Undersecretary and Chief Economist Gil S. Beltran said that robust macro-economic fundamentals such as strong external position and ample fiscal space will continue to sustain the momentum for high GDP.
For 2018, the government is targeting around 7.0 percent to 8.0 percent GDP growth.
Beltran noted the passage of the first package of tax reforms will bring in additional resources to fund the ambitious infrastructure plans and greater spending on social services.
“These investments are game-changing in the sense that they catalyze further investments, which, in turn drive investment-led growth, generate meaningful employment, and subsequently reduce poverty,” the finance official said.
“With the implementation of infrastructure projects, the motion is set for investment-led growth,” he added.
The economy grew by 6.8 percent in the quarter ending March on the back of strong industrial and services output.
Industry surged by 7.9 percent, while services rose by 7.0 percent.
Manufacturing, on the other hand, maintained its above-average growth of 8.0 percent, contributing to as much as two percentage points to the economic expansion.
Construction, likewise, maintained its above 9.0 percent growth, adding 0.5 percentage point to growth.
From the demand side, household consumption remained robust while government consumption maintained its double-digit growth.
Capital formation, meanwhile, resumed its double digit expansion pace as public construction maintained its above 20 percent growth reflecting implementation of critical infrastructure projects.
Finance Secretary Carlos G. Dominguez III earlier said that the government will be “more aggressive” on spending for its “Build, Build, Build” program and other poverty-reduction initiatives.
“President Duterte’s commitment to attaining an investment-led and inclusive economy via a massive public spending strategy would usher in what the Asian Development Bank (ADB) has forecast to be the ‘golden age’ of the Philippines’ economic growth,” Dominguez said.