Metro Manila (CNN Philippines, August 17) — Increased government spending contributed to the 6.5-percent gross domestic product (GDP) growth in the economy for the second quarter of 2017, economic officials said Thursday.
The 6.5-percent growth in the second quarter ending June is up slightly from 6.4-percent growth posted in the first quarter ending March. However, this is down from the 7.1 percent registered in the same period a year ago.
“Taking the last quarter’s GDP growth, where the government’s spending performance was lackluster but where the private sector stepped up, and then this quarter’s GDP growth, where government really stepped up but where private sector slackened, just think what could happen if both government and private sectors together exerted that extra effort,” said Socioeconomic Planning Secretary Ernesto Pernia in a press briefing.
The second quarter GDP of 6.5 percent is on the lower range of the 6.5 to 7.5 percent target for 2017.
GDP represents the total value of all the goods and services produced in the Philippines within a certain period. It serves as a gauge of an economy’s health.
Analysts said the 6.5 percent GDP was slightly better than what they expected.
April Lee Tan, research head for online stockbroker group COL Financial, told CNN Philippines that the figures are slightly better than what people were expecting.
“Most notable for me was the pick-up in government spending,” said April Lee Tan, research head of online stockbroker group COL Financial. “People aren’t disappointed,” she said.
Although household consumption remained steady at 5.9 percent, government consumption leaped from 0.1 percent in the first quarter to 7.1 percent in the second quarter, said Pernia.
Budget Secretary Benjamin Diokno said in an August 8 Senate hearing that government underspending, where the government does not spend its budget within the allotted time, has been a “major flaw” in the Philippines since 2014.
