Private sector, not gov't, led 2Q acceleration
MANILA - The government said growth likely picked up in the second quarter, and the private sector led it amid weak state spending.
"Growth will come mainly from the private sector," Gil Beltran, chief economist of the Department of Finance, said in a text message on Tuesday.
Beltran said manufacturing expanded 13 percent in April and May, services between 6 and 7 percent, and agriculture at 4 percent.
Unless they slowed down a lot in June, all of those will be faster than in the first quarter, indicating they'll push the over-all number higher.
Economic Growth Comparison
April to May First Quarter
Manufacturing 13% 6.8%
Services 6-7% 6.8%
Agri 4% 0.9%
That's not the case with government spending.
The government on Monday reported spending climbed 44 percent in June, the biggest increase since February 2002.
It was bolstered, according to Budget Secretary Butch Abad, by delayed disbursements from the first quarter, mostly for infrastructure, the Pantawid Pamilya Program, and PhilHealth premiums.
Undersecretary Bon Moya put it more bluntly.
"After we saw the first quarter numbers, we started to breathe down the agencies to improve budget utilization," Moya said in a text message. "I think the pick up is across the board."
Monthly Government Spending Growth
Jan 183-B +16%
Feb 130-B +5%
Mar 170-B +14%
Apr 144-B -6%
May 161-B -4%
June 201-B +44%
But since the June jump followed declines in April and May, second quarter spending was up just 10 percent, slower than the first quarter's 12 percent.
Spending growth slowed in the second half of last year as the PDAF pork barrel system was declared unconstitutional and President Aquino's DAP spending program was questioned in court.
The Supreme Court declared DAP unconstitutional earlier this month.
Quarterly Gov't Spending Growth
Jan-March 459.9-B +12%
April-June 505.1 -B +10%
Beltran expressed confidence the June increase can be sustained, and will revive confidence in the government.
"Government spending is not as bad as April and May levels indicate, due to robust June growth," he said. "Those institutions that downgraded our GDP projection may have a change of heart after seeing our June spending."
Institutions like the International Monetary Fund, which has cut its Philippine growth forecast, have said the country's growth hinges on the government's ability to increase spending for infrastructure and services.