By Chino S. Leyco
The national government’s healthy fiscal condition would remain a major pillar for the country’s economic growth in the coming quarters, the Department of Finance (DOF) said Friday.
Finance Undersecretary Gil S. Beltran said the improving revenue sources of the government would drive the country to hit a high, sustainable and inclusive economic expansion pace.
Beltran in particular noted the 15.7 percent tax collection efficiency of the national government in the first nine months, which was already approaching its pre-Asian financial crisis tax effort level of 15.8 percent in 1997.
But he still said the Duterte administration needs to continue working with Congress for the timely passage of the 2020 budget to avoid the repeat of this year’s delayed general appropriations act.
To recall, President Duterte’s economic team had blamed the budget delay for the anemic economic performance in the first six-months of the year, which fell below the 6.0 percent to 7.0 percent target.
However, the economy rebounded in the third-quarter to 6.2 percent, an improvement from 5.5 percent during the April to June period and 6.0 percent in the same quarter last year.
The third-quarter growth, driven by the uptick in government catch-up spending plan, brought the gross domestic product (GDP) average to 5.8 percent in January to September.
Beltran said the economy remained consumption-led, buoyed by the steep drop in inflation now at 0.8 percent in September.
In the quarter ending September, consumption increased by 5.9 percent, higher than the 5.3 percent in the same period last year.
According to Beltran, higher consumption level was among the signs that government spending and public investment were picking up.
But he also noted that investment remained timid last quarter despite the recovery of public construction and lower interest rates.
The finance official attributed the weaker investments on uncertainty in the world economy as well as“robust” expansion in previous years that dampened the needs to increase factory capacities.
Public construction, however, grew by 11 percent in the third quarter, reversing the slump in the preceding second quarter.
Growth in private sector construction, meanwhile, nearly doubled to 19.1 percent last quarter from 10.4 percent a year ago.
From the supply side, the services sector maintained its growth of 6.9 percent. The double digit growth in construction tempered the deceleration in manufacturing activities.
More favorable weather conditions, meanwhile, resulted in agriculture growing by 3.1 percent in the third quarter.