Abad: PH GDP increased by 6-7% in 2014

By , on January 8, 2015

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MANILA – Budget Secretary Florencio Abad on Wednesday announced that the Philippine economy grew by 6-7 percent last year because of feeble government spending.

He also said that the country’s economic managers decided to retain the gross domestic product (GDP) target for this year at 7-8 percent, lower than their previous projection.

“We do have challenges that we need to deal with, some beyond our control,” Abad pointed out referring to external challenges which include global oil prices cut back and slower economies of trading partners.

He pointed out that the “dramatic decrease” in oil prices will affect the Bureau of Customs’ (BOC) tax collection.

Earlier, BOC Commissioner John Philip Sevilla said that their collection targets would not be attained due to low oil prices.

Aside from that, slower public spending last year will still be a trend until 2016, claimed Abad.

“There was difficulty in getting key spending agencies to disburse according to program,” said Abad referring to the issues that affected country’s budget which include the controversial Disbursement Acceleration Program (DAP) and Priority Development Assistance Fund (PDAF).

Without the PDAF and DAP, spending went down by 1-1.5 percent, Abad said. Given this, 2014 GDP growth would have been at 6-7 percent, one percent below their target.

To address this, Abad said that under-spending “will not be tolerated.” The government would encourage disbursements by penalizing those who under spend.

“Agencies must spend as they should,” he pointed out.

Key spending agencies will meet at the Office of the President after the Papal visit to discuss measures in order to fast-track spending, shared Abad.