Philippines may still grow by 6% this year, says Remolona

MANILA  -Despite a disappointing second quarter output, Bangko Sentral ng Pilipinas Governor Eli Remolona Jr. expects the domestic economy to pick up pace and attain a full-year growth rate of 6 percent, the lower end of the government’s target range for 2023.

In a chat with business editors on Tuesday night, Remolona said while 7 percent, the upper end of the target, may no longer be feasible, “we think it (growth) would hit 6 percent.”

One distinct factor that had caused the country’s second quarter gross domestic product (GDP) growth rate to soften to 4.3 percent, Remolona explained, was government underspending, which was now being addressed.

Iluminada Sicat, senior assistant governor of the Monetary Policy Sub-sector, noted that the Department of Budget and Management had committed to push various agencies to “fast-track their expenditures in accordance with the 2023 budget.”

One of the underspending government agencies is the Department of Social Welfare and Development, Sicat noted, but only because it was cleaning up its database of Pantawid Pamilyang Pilipino Program or 4Ps.

Patterned after the conditional cash transfer scheme implemented in other developing countries, the 4Ps program provides cash grants to beneficiaries provided that they comply with the set of conditions.

“Once everything has been validated and verified, then disbursement of ayuda (cash support) to relevant population will be fast-tracked,” Sicat said.

In 2022, the Philippine GDP grew by 7.6 percent, exceeding the government’s target of 6.5 to 7.5 percent. This was the fastest pace seen since 1976 and made the country one of the best-performing economies in Southeast Asia. 

Asked about whether he shares the concern of some economists on the widening of the current account deficit, Remolona said the big surplus recorded in previous years had been due to underinvestment.