MANILA, Philippines – The Philippine economy is seen to have grown at a faster pace in the second quarter, on the back of robust public spending, an official from the Department of Finance (DOF) said.
Finance Undersecretary Gil Beltran said spending from April to June may boost the country’s gross domestic product (GDP) to within the government’s 2014 target of 6.5 percent to 7.5 percent.
"Public spending in the second quarter will provide a boost to GDP. Those institutions that downgraded our GDP projection may have a change of heart after seeing our June spending,” Beltran said.
In June this year, public spending hit P201.13 billion, an increase of 44 percent from the P139.54 billion spent in the same month a year ago.
The surge in spending brought the year-to-date expenditures to P987.71 billion, an 11 percent jump year-on-year from P890.75 billion.
The country’s economy will also likely be driven by strong remittances and services, and expansion of the manufacturing sector.
The Philippine economy only grew by 5.7 percent in the first quarter, the slowest growth rate in the last nine quarters.
Socioeconomic Planning Secretary Arsenio Balisacan, however, said targets are still within reach due to a fundamentally strong economy that is expected to continue growing at an increasing pace.
“The growth momentum will likely strengthen within the near-term, notwithstanding the risk and challenges that the economy is facing. We remain confident that we will meet the growth target of 6.5 to 7.5 percent for the full year of 2014,” Balisacan said.
Meanwhile, the weak first quarter performance of the Philippine economy prompted the International Monetary Fund (IMF) to slash its GDP projection for the Philippines for the year to 6.2 percent from 6.5 percent.
An analyst at Lucky Securities, Tristan Valerio, believes the Philippine economic growth in the second quarter won't be "stellar," saying it is unlikely that GDP in the second quarter was able to rebound from a disappointing first quarter.