Second-half prospects ‘brighter’, says NEDA exec

ECONOMIC GROWTH will likely pick up in the second half as the government spends more and Philippine businesses benefit from a Japanese recovery, a planning official yesterday said.
Worries over the economy should be tempered since sluggish first quarter gross domestic product (GDP) was due more to global troubles and the new administration’s adjustment phase, National Economic and Development Authority (NEDA) assistant director-general Ruperto P. Majuca told reporters at the sidelines of a communications forum.

“I should stress that the first quarter and second quarter growth is an aberration. It does not reflect the true strength of the economy,” Mr. Majuca said.

“We were buffeted by so many negative shocks like Japan’s crippled supply chain, the MENA (Middle East and North Africa) oil crisis, price pressures, and then we were cleaning up government processes,” he added.

“But in the third quarter and fourth quarter, expect brighter prospects because Japan’s supply chain will be normalized then we can facilitate in the rehabilitation, and the government will most definitely have higher expenditures, so underspending will no longer be an issue since fast-tracking spending is now the thrust of the government.”

First quarter GDP growth eased to 4.9% from 8.9% a year earlier, blamed on government underspending and weak exports. Second quarter data is scheduled to be released later this month and the NEDA official declined to provide details.

“Officially, the DBCC (Development Budget Coordination Committee) needs to be the one to make that statement after they look at the second quarter numbers,” Mr. Majuca said.

Socioeconomic Planning Secretary Cayetano W. Paderanga Jr. has said the economy may have grown faster between April and June. Earlier this month, however, he said renewed concerns over the global economy — spurred by the United States’ credit rating downgrade and the eurozone’s continued debt woes — had prompted a review of the GDP growth targets — officially at 7-8% for this year but set at a lower 5-6% in the national budget. — ENJD, Businessworld