Philippine govt to overspend in 2015

Philippine govt to overspend in 2015

After anaemic spending tempered economic growth this year, the government may overspend early next year mainly for infrastructure, according to economic planning secretary Arsenio M. Balisacan.

“Underspending during the past two quarters (this year) would mean we should be overspending next year [to compensate]. That should make the government a major contributor to growth in 2015,” Balisacan, who is also the director-general of the National Economic and Development Authority (Neda), told reporters last week.

Philippine Statistics Authority data showed that spending by government agencies slowed by 2.6 per cent year-on-year during the third quarter from a 7-per cent increase in disbursements in the same period last year and flat growth in the second quarter.

Lower public spending dragged the third quarter gross domestic product (GDP) growth to only 5.3 per cent.

“Government spending for this year was restrained, and it held back growth,” Balisacan said.

In November, Balisacan admitted that the Supreme Court decision on the controversial Disbursement Acceleration Program earlier implemented by the Aquino administration had “chilling effects” on how government agencies spend their allocations.

The high court ruled that DAP, a stimulus package aimed at fast-tracking public spending to spur economic growth, was unconstitutional.

Also, government agencies had been more careful in their disbursements amid a more watchful eye of the Commission on Audit, the Neda chief said last month.

But Balisacan said he was “confident that we have learned our lesson this year very well, and employ this lesson to get the spending program fast-tracked starting the first quarter of next year.”

Post-“Yolanda” (international name: Haiyan) rehabilitation under a 67.9-billion pesos (US$1.52 billion) master plan approved by President Aquino last October is expected to spur government disbursement in early 2015.

Faster spending of government funds is also needed to build vital infrastructure such as roads, railways and airports, Balisacan said.

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