Fitch warns against gov’t underspending

By on June 24, 2015

Wikipedia Photo
Wikipedia Photo

MANILA — A debt watch keeper believes that government underspending may demonstrate negative effects on the country’s economic growth.

Fitch Ratings warned against the ill effects of underspending to the country’s economy amid the lack of proper ways of public fund disbursement.

“Fitch does not expect a significant pick-up in public investment as bottlenecks remain with respect to disbursement of public funds. Furthermore, a narrow revenue base is likely to prevent a material increase in public spending,” Fitch said.

Fitch maintained its 6.3-percent forecast in the country’s gross domestic product growth in its latest Asia Pacific Sovereign Overview.

Owing to weak exports and the reported public underspending, the country’s economy grew by only 5.2 percent during the first quarter.

While the expenditures reached P504 billion, increasing by four percent, it still fell short of the government’s program of 13 percent.

Despite this, the Philippines reached the investment-grade of “BBB” from Fitch with a “stable outlook.”