The Department of Finance said faster economic growth will be sustained in the coming months due to prevailing strong economic fundamentals of the Philippines.
Finance Secretary Carlos Dominguez III said in a statement over the weekend the pickup in growth in the fourth quarter of 2019 of 6.4 percent, resulting in part from the government’s catch-up spending following anemic expansion in the year’s first semester, would gain speed in 2020.
He sees the domestic economy firing on all cylinders as a result of even more vigorous investments in infrastructure and human capital development for the entire year ahead.
With the timely approval of the 2020 General Appropriations Act and the extended validity of the 2019 GAA till end-2020, Dominguez expects “a double-barreled boost enough to sustain—and even crank up the level of catch-up spending that the economic team… carried out in the remaining half of last year… ”
President Rodrigo Duterte approved the P3.7-trillion budget for 2019 only in April, after months of impasse between the two houses of Congress. As a result, economic growth in 2019 slowed to an eight-year low of 5.9 percent and missed the target range of 6 percent to 6.5 percent.
Meanwhile, Finance Undersecretary and chief economist Gil Beltran said three forecasters accurately predicted the 6.4-percent gross domestic product expansion in the fourth quarter. The DoF has been analyzing the quarterly growth projections by 20 private sector experts.
Beltran said the analysts were Alex Holmes of Capital Economics, Emilio Neri Jr. of Bank of Philippine Islands and Ruben Carlo Asuncion of Union Bank of the Philippines.”
“These three analysts got the Q4 2019 GDP growth exactly right, so it follows that their full-year estimates will also be correct because GDP growth figures from the first three quarters were already reported by the PSA (Philippine Statistics Authority),” Beltran.
In addition, he said that three more analysts made forecasts that were close enough to the official estimate to make their 2019 full-year estimates of 5.9 percent correct.
“These are Jefferson Arapoc of the University of the Philippines, Romeo Bernardo of GlobalSource Partners, and Alvin Ang of the Ateneo Center for Economic Research and Development,” Beltran added.
The DOF analyzed the growth forecasts of 20 analysts from institutions that regularly release their estimates through the media.
The latest forecasts came as the country remained among the fastest-growing major economies in Asia.
Based on the latest GDP growth figure for the third quarter of 2019, which the PSA revised downward from 6.2 to 6.0 percent, the following analysts made accurate forecasts for that period: Neri, Jonathan Ravelas of BDO Unibank Inc. and Patrick Ella of Sun Life.
“The DOF will continue to regularly monitor GDP forecasts to help promote accountability and incentivize the use of better forecasting models,” Beltran said.