The Budget Department said Tuesday the government will accelerate spending in the second and third quarters of the year to boost economic growth after an anemic expansion in the gross domestic product in the first quarter of 2015.
Journalists Association of the Philippines-ING Bank forum held at the Makati Shangri-La,
Manila hotel in Makati City. GABRIELLE H. BINADAY
Abad said about P468 billion of state funds not utilized since 2013 were carried over this year and increased the total budget spending to P900 billion.
He said the government would use the funds to fund on-going Yolanda rehabilitation and public-private-partnership projects.
Abad cited Administrative Order 46 signed on March 30 directing all government agencies to implement measures to facilitate the budget execution for 2015.
“If you look at the figures there’s actually an improvement [on spending] and I think those will be felt in the latter part of the second quarter and certainly in the next semester,” Abad said.
He conceded that the government focused a lot on corruption issues and overlooked vital matters that caused the GDP to grow at a disappointing 5.2 percent in the first three months of 2015.
“It’s not really late [reforms], because initially what we thought we had to deal with were issues of leakages, and corruption… We realized late that there are other fundamental things that are dragging spending and these have to do with the technical deficits, but because of continuing reforms of promoting transparency and inducing more resiliency, necessarily some of these projects will slow down.,” he said.
The sluggish state spending has also affected the construction of school buildings by the Education Department.
“When I checked with {Education Secretary] Armin Luistro, he said that the problem was he had to review all the problem of classrooms, they had to make sure that they are typhoon-proof,” Abad said.
“I don’t think the institutional weakness should be an excuse to slow the economy down, I think we should allow, and I think the name of the game for us is to really catch up much faster than what we have been doing in the first quarter,” he said.
The first-quarter growth was the slowest since the 3.7-percent expansion recorded in the fourth quarter of 2011. It was also slower than the 5.6-percent growth a year ago and the revised 6.6-percent expansion in the fourth quarter of 2014 and fell below the government’s target of 7 percent to 8 percent for 2015.
“The 5.2-percent GDP growth in the first quarter of 2015 is lower than what the government and the market expected for the period. While growth in the private sector remains robust, the slower-than-programmed pace of public spending, particularly the decline in public construction, has slowed down the overall growth of the economy,” National Economic and Development Authority director-general and Economic Planning Secretary Arsenio Balisacan said earlier.