THE Department of Finance said solid macro-economic fundamentals such as strong external position and ample fiscal space will continue to sustain the country’s high-growth momentum.
The economy grew 6.8 percent in the first quarter, faster than 6.5 percent a year ago and 6.6 percent a quarter ago, driven mainly by higher spending and the robust performance of the manufacturing, trade and services sectors.
The DoF in an economic bulletin on Friday also said the passage of the first package of tax reforms would bring in additional resources to fund the ambitious infrastructure plans and greater spending on social services.
“These investments are game-changing in the sense that they catalyze further investments, which in turn drive investment-led growth, generate meaningful employment, and subsequently reduce poverty,” it said in a statement.
“With the implementation of infrastructure projects, the motion is set for investment-led growth,” the DoF said.
The Duterte administration earlier embarked on a massive P8.4-trillion “Build, Build, Build” program that aims to construct more infrastructure projects nationwide to further boost economic activities and lure more foreign direct investments and tourist arrivals.
Under the program, the government will construct more roads, bridges, airports, seaports, railways and water and irrigation projects. A 25-kilometer subway will also be built in the Metro Manila to decongest the metropolis of heavy traffic that has been causing around P3.5 billion in economic losses daily.
The industry sector in the first quarter surged 7.9 percent while services expanded 7 percent. Manufacturing maintained its above-average growth of 8 percent, contributing to as much as 2 percentage points to the economic growth.
Construction maintained its above-9 percent growth, adding 0.5 percentage point to the growth.
From the demand side, household consumption remained robust while that of government maintained its double-digit growth. Capital formation resumed its double digit growth as public construction kept its above 20-percent growth, reflecting the implementation of critical infrastructure projects.