THE PHILIPPINE economy is likely to expand by 6% this year, taking into account the headwinds that would likely affect growth, incoming Socioeconomic Planning Secretary Arsenio M. Balisacan said.
“[The] inflation that we are seeing is very much imported, and obviously, will temper our growth a bit. We were expecting growth at the beginning of the year to be around 7-8%, but many things have happened since then, and we are still confident that we’ll achieve 6% growth, and that already takes into account the problems in the global and domestic markets,” he said in a Bloomberg TV interview on Monday.
Last month, the Development Budget Coordination Committee (DBCC) lowered the gross domestic product (GDP) growth target to 7-8%, from 7-9% previously, reflecting the impact of the Russia-Ukraine war, the economic slowdown in China, and monetary policy tightening in the United States.
Inflation accelerated to 5.4% in May, the highest in three and a half years, as fuel and food prices continued to climb amid the ongoing Russia-Ukraine war and supply chain disruptions.
The DBCC also raised the average inflation rate assumption to 3.7-4.7% for 2022, from 2-4% previously.
“The goal is to rapidly ramp up our economic recovery while living with the uptick in prices,” Mr. Balisacan said.
“We’ll have to improve our capacity to address supply bottlenecks. We’ll need to work closely with our trading partners, and make sure we have access to food supply in particular, and basic inputs needed for manufacturing and other industries.”
Mr. Balisacan, who is currently the chairman of the Philippine Competition Commission, said the incoming administration will continue the Duterte administration’s flagship infrastructure projects.
“Given the backlogs in our infrastructure programs, and the infrastructure needs for our economic development, we definitely need to sustain the ramping up of our infrastructure development,” he said.
The Department of Public Works and Highways said only 12 out of 119 flagship projects have been completed as of April.
Asked how the government will fund these projects, Mr. Balisacan said: “We will resort to other means, both internal and external… By external, I mean bilateral and multilateral sources. By internal, I mean the government sources and with our private sector.”
“We will invigorate our public-private partnership thrust to building infrastructure,” he added.
Mr. Balisacan said the private sector’s participation in infrastructure projects is obvious, “given the fiscal bind we are facing.”
“Besides, we also believe this private sector can bring in innovations, technologies in the improvement and management in our public services. There is much that can be gained from getting the private sector involved in our infrastructure development.”
For this year, the government has set aside P1.199 trillion, or 5.5% of GDP, for its infrastructure program. — TJT