NEDA optimistic on PH economy's growth prospects

By Anna Leah Gonzales

July 25, 2023, 7:55 pm

<p><em>File photo</em></p>

File photo

MANILA – The expansion of the Philippine economy is expected to moderate in the second quarter of the year but the lower end of the government's 6 to 7 percent target will likely still be met, National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said Tuesday.

"We will probably see growth further moderate but not far enough, down enough to allow us to miss the target," Balisacan said on the sidelines of the post-State of the Nation Address (SONA) at the Philippine International Convention Center (PICC) in Pasay City.

Economic managers earlier set a 6 to 7 percent economic growth target this year.

For the first quarter of the year, the economy grew by 6.4 percent.

Balisacan said for the second quarter, growth will likely be driven by consumption and investments.

He said construction will also likely to contribute to growth as the lifting of quarantine restrictions is expected to boost construction activities.

However, Balisacan said exports likely slowed due to the continued uncertainties in the global environment.

"I think in the past, it is domestic demand that has been fueling the economy and that is why our thrust is to diversify sources of growth to include also the external side -- the exports," he said.

To achieve the lower end of the government's 6 to 7 percent economic growth target, the NEDA chief said the economy should grow by at least 5.9 percent in the next three quarters.

Balisacan cited one positive development which is the slowdown in the headline inflation rate.

"I think one thing positive is inflation has been coming down, still a bit high but the fact that it has been going down should have helped shape the expectation about the near future and that would inspire confidence in spending," he said, adding they are optimistic that inflation will settle within the 2 to 4 percent target in the fourth quarter.

Headline inflation slowed for the fifth consecutive month, settling at 5.4 percent in June.

In a panel discussion during the post-SONA, Balisacan also cited the importance of “Build Better More” infrastructure program as a catalyst for the country’s social and economic transformation.

"With a focus on delivering essential projects such as expressways, bridges, airports, railways, ports, telecommunications, and other social infrastructure, we will be able to significantly reduce the cost of doing business, expand market opportunities especially for micro, small and medium enterprises or MSMEs, and promote high-quality job creation and innovation,” he said.

The “Build Better More” infrastructure program includes 194 Infrastructure Flagship Projects (IFPs) worth around PHP8.3 trillion.

“These 194 big-ticket infrastructure projects aim to address the binding constraints to business investment and expansion. The goal is to create more high-quality and resilient jobs offering better wages to Filipino workers. This is key to significantly reducing our country’s poverty incidence to single-digit levels by 2028,” he added. (PNA)