MANILA, Philippines - Prospects of high economic growth in the middle of President Aquino’s term will be more achievable following the surprising yet impressive 7.1 percent gross domestic growth in the third quarter this year, a key Palace official indicated yesterday.
Budget Secretary Florencio Abad said an increase in public infrastructure spending, particularly on flood-control projects, “will help shore up the Philippines’ economic growth prospects in the medium-term.”
In a statement, Abad confirmed a recent report of the Citigroup Inc. on the matter, noting that the “swift pace of disbursements will likewise sustain the country’s strong growth momentum, especially in view of the country’s better-than-expected GDP growth.”
He said spending levels this year surpassed that of 2011.
“The Philippines is certainly headed in the very same direction that the Citigroup report is pointing to. Since the year began, we have been doing very well in sustaining our GDP growth, and our stunning third-quarter performance is proof enough of that,” Abad said.
He said the role of public infrastructure spending is so important.
“We have been ramping up our public works to further strengthen our economic base, with flood control projects right at the heart of the action,” he said.
Supporting the Citigroup’s forecast for higher public works expenditure, Abad also confirmed an end-October report by the Department of Public Works and Highways, which showed robust year-on-year spending by the DPWH.
According to the report, the DPWH disbursed P65 billion of its total allocation within the first half of 2012 alone, outgunning the agency’s year-on-year spending rate in 2011, which amounted to only P26 billion of the agency’s total allocation.
DPWH spending as of Oct. 31 also registered at P115.5 billion, beating the agency’s own disbursement figures by at least 35 percent by end-November in 2011, which peaked at only P85.4 billion.
“The fact that the DPWH has disbursed more by October this year than it did by November 2011 speaks volumes about the agency’s improved year-on-year spending,” the former Batanes congressman said.
“Beyond the bare figures this means that the DPWH has overcome many of the spending bottlenecks it encountered last year. The agency won’t therefore be scrambling for time to meet its disbursement targets by the end of 2012,” Abad said.
He said the government is looking forward to more vigorous infrastructure spending in the coming months, which will create a positive impact on the country’s fiscal performance.
“It helps as well that the international community has given us quite a vote of confidence, and we are determined to foster an economic environment that encourages as much growth as they now predict,” he added.
Abad also noted the recent P1.03-billion fund release to DPWH for the implementation of flood-control projects in Metro Manila and surrounding areas, in line with Citigroup’s forecast of increased spending for public construction, especially for flood works.
The release comprises the P5-billion allocation approved by the National Economic and Development Authority for flood-mitigating projects under the Aquino administration’s Flood Management Master Plan.