MANILA, Philippines— The release of the disappointing national income accounts for the third-quarter of 2014 has led economic analysts to conclude that the Gross Domestic Product (GDP) target set by the Aquino administration is now virtually unachievable.
Experts noted that to reach the GDP target, there needs to be a highly significant improvement in state spending in the remainder of the year, as well as a never before seen expansion; factors which have led them to surmise that the target is now, in reality, unattainable.
Manila-based ING economist, Joey Cuyegkeng, pointed out on Thursday that “government spending is a wild card,” and that “optimism of a rebound in spending is fading.”
The third quarter national income was impacted by the slow growth rate of the Philippine economy; which was pegged by the Philippine Statistics Authority (PSA) at 5.3-percebnt; the most sluggish since 2011. This dragged down the average rate of growth from January to September 2014 to 5.8 percent, which falls very much short of the targeted 6.5 to 7.5 percent.
Experts noted that in order to achieve the lower end of the target range, the economy needs to grow by a minimum of 8.2 percent. However, steep prices of consumer goods slowed down domestic consumption from July to September..
Cuyegkeng said that ING was still preparing a more solid analysis, but expressed his doubts that the economy would top a 6-percent growth rate for 2014. Other banks, such Singapore’s DBS bank and Metropolitan Bank & Trust Co., have voiced similar prognoses.