MANILA—The Philippine economy is projected to accelerate 6 to 7 percent this year, hitting the mid-range of the government’s target, on the back of robust infrastructure spending and growth in services.
Government think tank Philippine Institute of Development Studies (PIDS) President Dr. Gilberto Llanto said a 7-percent gross domestic product (GDP) is not impossible to achieve in 2017, barring unforeseen events like huge calamities.
“We have fiscal space. You have a government that knows its priorities; it says coordinates of infrastructure at the same will provide better social protection,” he said in an interview.
Llanto cited an earlier Asian Development Bank (ADB) publication that identified tight fiscal situation and inadequate infrastructure among critical constraints that impeded Philippine economic growth.
“That is why the government is focusing (on these issues). So definitely, if we really push the infrastructure envelope, then we will grow because employment will be created, there will be backward and forward linkages and then you provide necessary conditions for business to do their business well,” he explained.
The Duterte administration planned to spend Php8.64 trillion to fund the “golden age of infrastructure” over the next six years.
Llanto, who also served as deputy director general of the National Economic and Development Authority (NEDA), further said the services sector will continue to be a strong growth driver this year.
“We can attribute this to the quality of service that the Filipinos and these professionals have been providing. I’m not just talking of call centers because service industry, the business process management (BPM) is not just about call centers. They have gone into higher-value adding activities,” he added.
The government targets the country’s GDP growing within the range of 6.5 to 7.5 percent in 2017 from last year’s 6.8-percent expansion, which was among the fastest in Asia.
”Compared to our neighbors, you look at the numbers, we are doing very well with respect to inflation, macro management and even the potential,” Llanto said.
”Remember, we are a nation of 100 million people. There is an advantage to size also. And we have a young population, well educated. So it just takes a little bit more push,” he further said.
The Philippine Statistics Authority (PSA) is scheduled to release the first-quarter GDP results on May 18.
Socioeconomic Planning Secretary Ernesto Pernia earlier said the economy likely expanded 7 percent in the first quarter of 2017 on increased government spending and strong domestic consumption.