Government spending likely increased by up to 16 percent in the fourth quarter of 2015 on robust infrastructure activities, Budget Secretary Florencio Abad said Tuesday evening.
Abad told reporters the fourth quarter saw a 10-percent to 16-percent increase in government disbursement, following higher infrastructure and other capital outlays meant to support economic growth.
“In terms of fourth-quarter outlook, I think you are going to see about anywhere from 10 to 16-percent increase in disbursement. That is highlighted by easily about 13-percent increase in infrastructure spending over the fourth quarter of 2014,” Abad said.
“Well, I mean.. You know that’s a very small part of [economic] growth but if it were to depend on public spending, then we can project that robust increase,” he said.
The inter-agency Development Budget Coordination Committee set the target expenditures for the fourth quarter of 2015 at P651.97 billion, bringing full-year disbursement program to P2.55 trillion.
Abad said the 6-percent growth in 2015 was still achievable as long as private consumption remained robust.
“Well, you have to look at private consumption and there is reason to hope that it will be as robust considering that Christmas season, election season and traditionally everybody rushes to close the book to spend as much at the end of the year. Especially since this year, you know it’s election year and with March 25 election ban, they all want to avoid that,” Abad said.
The economy grew 6 percent in the third quarter of 2015, pushing average growth for the nine months to 5.6 percent.
Economists said to achieve a “realistic” 6-percent full-year growth, the economy should grow around 6.9 percent in the fourth quarter of 2015.
Abad said he expected a faster growth in the fourth quarter.
“[Economic growth will] definitely better than the previous quarter. If I were just to base it on public spending, I will be more confident,” Abad said.
Economic Planning Secretary Arsenio Balisacan said he was also optimistic about achieving a higher growth rate in the fourth quarter.
“I am hoping it would be better than the third quarter. That’s my hope,” Balisacan said.
He said growth in the fourth quarter was likely driven by robust manufacturing and household consumption amid low inflation rate.