An economist has painted a rosy picture of the Philippine economic growth as the year draws to a close, fueled by the expected increase in consumer and government spending that will boost growth.
In a news forum on Saturday in Quezon City, Michael Ricafort, the Chief Economist at Rizal Commercial Banking Corp. (RCBC), said that the Philippine economy has already picked up in the third quarter and its recovery has been expected by the economists and government planners.
“Talagang expected po iyong recovery po ng economy natin. I’ve been monitoring this data, these numbers for more than 20 years, inaasahan po talaga natin na iyong pick up na ito – iyong forecast ko po eh halos pareho po doon sa ano… 5.9 percent po iyong actual, iyong forecast ko po 6 percent,” Ricafort said.
“Pero ngayon naman, nag-pick up na po… all systems go kasi ‘pag third quarter po talaga, every year halos lahat po ng taon for the past 20 to 30 years, may pick up po talaga ng economic activities ‘pag third quarter,” he added.
According to Ricafort there was a slowdown in the second quarter because there was no presidential elections unlike last year, taming spending by both the government and consumers.
Other factors were government’s underspending in the first half of the year and the acceleration in the prices of rice and petroleum products, he explained.
“Na-acknowledge naman po iyon so nag-pick up na po iyong spending kaya inaasahan na po natin talaga iyong pickup din ng overall economy, government spending nag-pick up po,” he said on government increased spending.
“Kasi…lalo na po sa infrastructure, na-acknowledge naman po iyon eh, iyong mayroon talagang challenge na kailangan i-maximize iyong utilization ng mga budget ng iba-ibang ahensiya at lalong pabilisin iyong pag-rollout po ng various infrastructure project. So nakatulong na po iyon, umaandar na po iyon.”
With regard to the increases in rice and fuel prices, Ricafort said there was a slowdown in consumer spending as a result, as he noted that usually, consumer spending is at least 72 percent of the economy.
He expected further acceleration on both government and consumer spending with the onset of the holiday season late this year.
“Kasi pini-prepare po iyong fourth quarter, iyong holiday season. Holiday season, iyan po kasi iyong pinakamalaking spending, pinakamaraming negosyo sa sales ng maraming tao, mga negosyo, industriya at ibang institutions,” he said.
“So pini-prepare po iyon, iyong importation may pick up na mga third quarter; manufacturing, production nira-ramp up po iyan para tamang maka-stockpile, papadala sa mga warehouse – either iyan for local market, export market.”
Mathematically speaking, he said consumer spending has been delivering, contributing the biggest chunk at more than 72 percent of the economy, sustaining the economic growth of at least 5 percent.
On government expenditures, he said, “Government spending iyon, medyo standout po iyon dahil talagang ni-ramp up na po after some slowdown in spending earlier this year, the need to increase the utilization of the budgets of the various agencies. Ngayon, nadi-deliver na kaya maganda po iyong data – isa po iyon sa key na nag-ambag, government spending, at least 7 percent.”
The Philippine economy has posted a higher gross domestic product (GDP) growth of 5.9 percent in the third quarter (Q3) of 2023, the strongest among major economies in Asia.
The Q3 GDP performance was faster than the 4.3 percent growth in Q2 2023 and exceeded the expectations of private analysts with a median forecast of 4.9 percent. PND
