Economy seen to perform better in 2016

MANILA, Philippines - The Philippine economy is expected to perform better in 2016 than this year as government continues to address bottlenecks in public spending, according to an official of the National Economic and Development Authority (NEDA).

The slower-than-programmed pace of public spending, particularly the decline in public construction, is the most immediate and biggest challenge of the Philippine economy, NEDA deputy director-general Emmanuel Esguerra told The STAR.

The issue in public spending resulted in slower growth of 5.2 percent in the first quarter of 2015 from 5.6 percent in the same period last year.

The government has set a full-year growth target of seven to eight percent this year and the next.

This means the economy needs to churn out at least a seven percent growth in the succeeding quarters to be able to hit the target.

Esguerra, however, noted public spending would increase for the rest of the year as government works to speed up budget execution in accordance with the Administrative Order 46 as well as the Republic Act (RA) 9184 or the Government Procurement Reform Act.

“The higher government spending will fuel even more activities in the private sector, and thus push economic growth in the succeeding quarters of the year,” he said.

“With unrelenting efforts to address bottlenecks in public spending, we are optimistic that 2016 will even be better,” he added.

NEDA is currently keeping a careful watch over the spending performance of the agencies to ensure the implementation bottlenecks are being addressed and the execution of programs and projects will not be further delayed, the official said.

Earlier this year, the World Bank and the International Monetary Fund backed the push to revamp the budget system aimed to arrest slow public spending and eradicate the bottlenecks in disbursements.

Department of Budget and Management Secretary Florencio Abad has been pushing for an organic budget act or a public finance management law in Congress, which aims to consolidate all policies, rules, processes in the budget and auditing and accounting process of government.