WB: PHL to miss growth target

Although the government committed with a catch-up plan on its spending to lift local output, gross domestic product (GDP) growth is seen to settle at a sub-6 percent level.

This was learned from World Bank (WB) as it pegged GDP growth for the Philippines at 5.8 percent, significantly lower than its previous 6.4 percent projection in April.

Also, this latest figure indicates that the government won’t be able to meet even its lower end target of 6 percent.

According to WB senior economist Rong Qian, “implementing challenges” would prove to drag the government’s catch-up plan on spending.

Among these challenges would be the rather long procurement process in the country.

“The downward projection considers the impact of the recent global developments in the Philippine economy as well as the sharp slowdown in incestmwnt growth in the first half of 2019,” Qian told reporters.

“While the government is trying to accelerate public investment…there are still implementation challenges that might prevent a full catch up…Government spending hasn’t picked up in July yet,” she added.

However, the WB economist said that they expect growth to recover in the medium-term.

“Growth outlook is expected to recover in the medium term despite extremely challenging external environment and domestic constraints,” the WB economist said.

“Fiscal policy is expected to remain supportive of growth as public investment recovers, getting back on track to close the country’s infrastructure gap,” she added.

Earlier, Socioeconomic Planning Secretary Ernesto Pernia said that the economy needs to grow by at least 6.4 percent in the second half to compensate its 5.5 percent print in the first half and enable the country to hit its lower end target of 6 percent.