The government needs to increase its expenditures in the months ahead to achieve an economic growth of more than 6 percent this year, Finance Secretary Carlos Dominguez III said Friday.
“To enable us to hit a GDP growth rate above 6 percent this year, national government needs to ramp up its spending. In 2019, national government disbursements are targeted to reach P3.774 trillion, equivalent to 19.6 percent of GDP. This is 10.7 percent higher than the actual disbursement in 2018,” Dominguez said after the Economic Development Cluster meeting held at the Department of Finance headquarters in Manila on Friday.
“For us to achieve this year’s disbursement target, the government must spend a total of around P2.996 trillion from the second to fourth quarters of the year,” Dominguez said.
He said infrastructure spending accounted for almost one-third of the amount of disbursements programmed for the suceeding quarters. Actual infrastructure disbursements in the first quarter of this year amounted to P207.2 billion.
“To reach our total infrastructure disbursement target of P1 trillion for the entire year, the government must disburse around P792.97 billion for infrastructure from the second to fourth quarters of the year,” he said.
He said total infrastructure disbursements must reach one P1 trillion, equivalent to 5.2 percent of the gross domestic product, with the national government accounting for P808.7 billion of targeted infrastructure spending,” he said.
The cluster held a meeting to formulate a carefully crafted and bold expenditure catch-up plan to hit a GDP growth rate of above 6 percent this year.
“The delay in passing the 2019 budget during the first three months of this year hit our economy hard. Public spending plays a crucial role in supporting the rapid expansion of domestic economic activity. This led to our GDP growth rate for the first quarter to fall below expectations, a four-year low of 5.6 percent,” Dominguez said.
Because of the budget impasse, Dominguez said the government was forced to work with last year’s budget. This resulted in underspending of around P1 billion per day during the first quarter.