Gov’t spending renders 6% GDP likely

Rounding 2019 with 6 percent growth in terms of the gross domestic product (GDP) is possible following stronger government spending in November, ING Bank senior economist Nicholas Mapa said.

“The strong expenditure showing by the government adds another case for the fourth quarter GDP to zoom to 6.6 percent, which would help bring full-year growth to the lower-end of the government’s 6 to 6.5 percent target,” Mapa said.

Consumption activity should remain robust with inflation subdued, “all the more powered by the more than 8 percent pickup in overseas Filipino remittance flows,” he added.

Also, the analyst said car sales growth and the resumption in construction activity should help lift local output expansion as well. Such would spell a revitalized investment activity in the sector.

Latest data from the Treasury show a wider budget deficit in November as government expenditures outpaced revenues.

“(NG) disbursements quickened further in November, posting a growth of 22.36 percent and outpacing the revenue expansion of 17.35 percent,” it said.

“This resulted in a P60.9 billion fiscal shortfall in November, wider by P21.8 billion against last year’s deficit,” it added.

According to Mapa, preliminary growth data of 11.7 percent in government spending in the fourth quarter will definitely help keep the hope of a strong 6 percent finish this year.

In addition, significant policy adjustments done by the Bangko Sentral ng Pilipinas in terms of the key policy and deposit reserve rates will help spur economic activity.