BSP sees better PH growth in H2
Credit to Author: Mayvelin U. Caraballo, TMT| Date: Fri, 25 Oct 2019 20:20:05 +0000
CENTRAL bank models suggest that Philippine economic growth in the last two quarters of the year would be much better than in the first two, according to a senior Bangko Sentral ng Pilipino (BSP) official.
“Our models are forecasting a recovery in GDP (gross domestic product) in the third quarter to a range of about 5.8 to 6 percent, and then the fourth quarter will be stronger than that,” BSP Deputy Governor Francisco Dakila Jr. said in a briefing on Friday.
A 6.5-percent GDP growth “can be reachable” by the fourth quarter, he added.
These forecasts compare with the slower-than-expected 5.6-percent and 5.5-percent GDP expansions in the first and second quarters that resulted in a 5.5-percent expansion in the first half of 2019, well below the government’s downwardly revised target range of 6 to 7 percent.
Asked for growth drivers, Dakila said the July-to-September outlook factored in improving government spending.
Latest data showed that state spending in September grew by 39.01 percent to P415.1 billion from P298.6 billion a year ago. This brought year-to-date disbursements to P2.62 trillion, 5.5 percent higher than the actual disbursements recorded for the same period of 2018.
Public expenditures from January to September also represent 98 percent of the P2.685 trillion programmed for the nine-month period.
Dakila said the Bangko Sentral’s models also assumed that government spending would continue to accelerate while a low inflation rate would encourage increased domestic demand in the fourth quarter.
“The acceleration in government spending will already be catching hold by that time as well, as this will come with spending during the Christmas season,” he explained.
“The low inflation numbers are going to provide a boost to consumption and this will coincide with…spending in the fourth quarter,” the deputy governor said.
Year-to-date inflation rate averaged 2.8 percent, which falls within the central bank’s 2 to 4-percent target range, after hitting a three-year low of 0.9 percent in September.
Dakila said forecasts “will imply that at [full-year] 2019 we should be seeing [GDP growth that] is close to the lower number of the growth target band of 6 to 7 percent for the year.”