GDP on track to grow 6% for full year

MANILA, Philippines – The pick-up in economic growth in the third quarter is expected to continue in the fourth quarter on the back of higher public spending, the Department of Budget and Management (DBM) said.

“As in the third quarter, public spending will once again play a pivotal role in the economic expansion in the fourth quarter,” Budget Secretary Florencio Abad said yesterday.

“It’s still possible to grow at six percent for the whole of 2015,” he said.

Economic expansion accelerated to six percent in the third quarter after a revised 5.8-percent growth in the previous three months, the Philippine Statistics Authority reported on Thursday.

This brought the nine-month growth to 5.6 percent, below the official seven- to eight-percent target this year.

Economic managers had long resigned to meeting the target, and instead have set sights on growing at least six percent this year. The economy grew 6.1 percent in 2014.

Abad, the chairman of the inter-agency Development Budget Coordinating Committee that sets growth targets, said the fourth quarter had traditionally been a strong period for government spending.

In the July-September period, government final expenditure rose 17.4 percent, faster than previous quarters.

This year, the impetus is stronger, Abad added, since public officials and agencies would want to finish their projects ahead of the election ban next year.

By law, bidding and awarding of public programs are prohibited 60 days before polls.

“Because of the reforms introduced, like the elimination of the need for SAROs, the significant reduction of lump sums and the advance procurement of goods and services, the DBM is certain to match its yearly average of 98 percent releases,” Abad said.

For this year, the 2015 budget became an automatic release document, removing the need for agencies to secure statement of allotment and release orders (SAROs) that authorities said have slowed down the disbursement process.

As of end-September, the DBM has said 96 percent of the budget is already with the hands of state agencies.

Additionally, the budget chief said agencies will be “motivated” to improve their disbursement performance with the “certain” passage of the Salary Standardization Law (SSL) 2015.