Finance execs see higher economic growth by 2H 2023

By Anna Leah Gonzales

October 9, 2023, 12:00 am

MANILA – The Philippine economy’s growth will be faster in the second half of the year, according to the projections of Department of Finance (DOF) Secretary Benjamin Diokno.

The Philippine economy grew by 4.2 percent in the second quarter of the year, bringing the year-to-date growth at 5.3 percent.

For this year, the government wants growth to settle at 6 to 7 percent.

"I think the third quarter growth will be better. In fact, that's also the judgment of IMF (International Monetary Fund). The second half of growth will be faster than the first half," Diokno said in his weekly press chat on Friday.

"Because historically also, the fourth quarter is where most infrastructure projects are done because it's dry season," he added.

To accelerate growth, the government is banking on the accelerated execution of programs and projects, including the delivery of public services, under the 2023 national budget.

Agencies have been mandated to submit their catch-up plan to boost government spending which fell below target in the first half.

"In the discussions with the line agencies, they outlined different issues that they have encountered and the catch-up plans that they devised were precisely to address these issues. And what they are showing is that with the implementation of these catch-up plans, there will be a significant improvement in the disbursement rate by the end of the year," Finance Undersecretary Zeno Ronald Abenoja said.

Abenoja said that while there's still a lot uncertainty, "the trajectory is a significant improvement from the performance as of the middle of this year."

The national government's cumulative budget gap for the first half of the year amounted to PHP551.7 billion, down by 18.17 percent from last year's PHP674.2 billion.

The first-half budget gap is also 28.49 percent below the PHP771.5 billion mid-year deficit program.

Spending during the period amounted to PHP2.4 trillion, or 6.6 percent below the PHP2.58 trillion programmed in the first half of the year.

"One issue, for example, involves procurement, the documentation requirements, how they define the terms of the procurement. So better design of the terms of the procurement will help ensure that the process will proceed as planned, and also engagement with the prospective bidders. So that's one example," said Abenoja.

Abenoja added that based on the submitted catch-up plans, most of the projects are supposed to be in the schedule wthin the remaining months of 2023.

"So they accelerated the preparations of these projects or programs to ensure that, as scheduled, they will be implemented by the second half of the year," he said. (PNA)