July 24, 2024

The Philippine economy remained one of the best performers in Asia after rebounding from an initial slowdown in the first two quarters of 2019 amid obstacles, reflecting the government’s spending catch-up and easing inflation.
Socioeconomic Planning Secretary and National Economic and Development Authority Director General Ernesto Pernia said the goal of advancing to an upper middle-income status is “going to be surer next year.”
“We are going to be reclassified as an upper middle-income country by next year and the downside to that will be less access to concessional loans. So we really have to make sure that we finish our major infrastructure projects that are big-ticket projects in terms of cost by 2023,” he said.
Pernia said the government intends to focus on projects that can be completed by 2022, as well as “those that can be started substantially such that it will be more difficult for the next administration to reverse.”
He said there is a grace period of three years from the time the country achieves the status before changes in terms and conditions of lending agreement take effect.
In the World Bank’s classification, upper middle-income economies are those with a gross national income (GNI) per capita of $3,996 to $12,375. The Philippine GNI per capita reached $3,830 in 2018.
The Philippine gross domestic product (GDP) accelerated by 6.2 percent in the third quarter, making it the second fastest-growing major economy after Vietnam, and ahead of China, India, Malaysia, Indonesia, and Thailand.
It recorded a 5.8-percent growth rate in the first three quarters of 2019, slightly below the lower-end of the government’s 6 to 6.5-percent full-year growth rate.
“The economy has continued to grow this year despite its initial slowdown in the first two quarters and the obstacles that were thrown its way — from the El Niño phenomenon that resulted in water shortages, the delay in the passage of the 2019 budget, to the US-China trade war, among other things,” Pernia said.
Authorities attributed the weak performance in the first two quarters of 2019 to the effect of the delay in the passage of the 2019 national budget, which prevented the government to spend on its infrastructure program, among others.
President Rodrigo Duterte signed this year’s budget only in April.
Economic managers thus implemented a catch-up spending program, which resulted in growth recovery in July to September. – PNA