Pernia says infra program can boost fourth quarter growth
Socioeconomic Planning Secretary Ernesto Pernia said the Duterte administration’s “Build, Build, Build” infrastructure program is the kind of “stimulus” that will boost growth in the fourth quarter.
“The Build, Build, Build spending has increased by 84 percent in the second half of- in the past two months so that has been a stimulus. And you know a stimulus, that kind of stimulus is strong enough to boost the economic growth to seven percent for the fourth quarter,” Pernia said in a media briefing in Pasig City on Thursday evening.
Though the year-to-date growth in the third quarter is slower than last year, he said it is “sustained and uninterrupted”.
“While the year-to-date GDP growth is at 6.3 percent and it is slower than the 6.8 percent growth recorded in the same period last year, the Philippines continues to be among the best performing economies in the region,” he said.
Pernia said the economy needs to expand by at least 7 percent in the fourth quarter to attain the low-end 6.5 to 6.9 percent revised GDP growth target for 2018.
He added the economy has been growing at least six percent for 14 consecutive quarters which is the strongest economic growth since the mid-1970s.
Asked about a report by Deutsche Bank that the economy is overheating, Pernia said he disagrees.
“I disagree that the economy is overheating. The fact that inflation is softening, that will also help in preventing overheating. I don’t agree with that kind of assessment,” Pernia said in a media briefing in Pasig City on Thursday.
Deutsche Bank last December 8 reported the economy is overheating as “strong domestic demand growth over the past three years has pushed core inflation up above the central bank’s target and the current account deficit has soared to a 19-year high of 3.3 percent of (gross domestic product)”.
National Economic and Development Authority (NEDA) Regional Development Undersecretary Adoracion Navarro said as 73.4 percent of firms in the country are operating below full capacity “belies the overheating claim”.
“There still room for further growth,” she said.
Pernia said NEDA is "optimistic that increase in consumer prices have already peaked and we expect inflation to normalize in the medium term."
The Bangko Sentral ng Pilipinas (BSP) said policy rates were held steady on Thursday after several months of increases.
BSP projects inflation to average 5.2 percent for 2018 and it will ease to 3.2 percent by 2019.
The inflation rate slowed down to six percent in November after rising eight straight months. Ella Dionisio/DMS
