MANILA – The Philippine economy is likely to buck the expected global slowdown in 2019 given the public investments set for the year, the Department of Finance (DOF) claimed.
Finance secretary Carlos Dominguez III said the Philippine economy is seen to grow faster this year despite the global headwinds.
“The Philippines is poised to buck the trend of a global growth slowdown in 2019, with its economy keeping its ascending trajectory onwards on the strength of the massive public investments programmed this year for infrastructure and human capital development along with prospects for higher consumer and business spending resulting from the government’s headway in taming inflation and improving the ease of business,” he said in an emailed statement.
The Duterte administration plans to spend over P8 trillion on its “Build, Build, Build” infrastructure program until 2022, largely funded by tax revenues.
In 2018, economic growth was recorded at 6.2 percent, a slowdown from the 6.7 precent recorded the previous year.
The DOF statement was released days after think tank Fitch Solutions Macro Research said the local economy is facing tough times in recovering from a weaker growth momentum this year.
Among the headwinds cited by Fitch Solutions are the re-escalation in global trade tensions, as well as softening business conditions.
“We at Fitch Solutions reiterate our view that the Philippine economy will struggle to reverse its weakening growth momentum over the coming quarters owing to tighter monetary conditions, the potential for a re-escalation of global trade tensions, as well as a deteriorating business environment,” Fitch Solutions said in a commentary.
Despite this, Dominguez said the country will still maintain its 7.0- to 8.0-percent target range for this year.
“President Duterte’s economic team is still maintaining 7 percent as a fighting target for GDP (gross domestic product) growth this year and thereafter, despite independent forecasts of sluggish global economic expansion arising from downside risks such as the trade spat between the United States and China and rising US interest rates,” he said.
Socioeconomic Planning secretary Ernesto Pernia last week said the government is still optimistic that it would reach its growth target range this year, even if the goal is merely “aspirational.”
“Lower inflation and the hefty personal income tax (PIT) cuts under the TRAIN will further spur domestic spending and thus fuel higher growth this year,” said the DOF. (GMA News)
