A lower inflation rate and the implementation of the government’s catch-up spending plans could contribute up to 0.9 percentage points (ppt) to the economy’s growth performance in the second semester, the National Economic and Development Authority (NEDA) said.
NEDA secretary Arsenio Balisacan said during the Development Budget Coordination Committee briefing at the Senate on the proposed 2024 National Budget yesterday the economy needs to grow by 6.6 percent in the second half of 2023 to achieve the year’s six to seven percent growth target, or an additional 0.4 ppt from the baseline forecast of 6.2 percent for the second semester.
Balisacan said there is a need to sustain the downtrend in inflation by intensifying supply-side interventions and demand-side management.
“If inflation can be lowered further to three percent in the second semester, we can pull up growth by an additional 0.1 ppt for the period,” he said.
He noted the need to accelerate the execution of government programs and projects, including the delivery of public services and formulate catch-
up plans on missed spending during the first semester.
“We estimate that the catch-up spending for public construction activities may add up to 0.3 percentage points in our economic growth in the second semester,” Balisacan said.
“Implementing the catch-up plan on maintenance and other operating expenses and personnel services will increase our growth by 0.5 percentage points in the second semester,” he added.
Meanwhile, President Marcos Jr. yesterday directed all government agencies to boost spending on social protection programs with the end goal of preparing the workforce for the further opening of the economy and the expected influx of foreign investors, Labor Secretary Bienvenido Laguesma said.
Laguesma, in a briefing in Malacanang, said the President also wants agencies to ensure the social protection programs are provided to the intended beneficiaries and those in need.
He said the target is to exhaust the budget allocation completely by the end of the year.
“Our catch up plans is not just in collaboration but also in partnership, not just with the local government units, but also with our legislators and most importantly, the private sector),” he added.
The President at a Cabinet sectoral briefing meeting tackled ways to address underspending and determine the steps to improve agency budget utilization.
Presidential briefer Daphne Oseña-Paez said that during the meeting, the DOLE and the Departments of Social Welfare and Development, of Health, of Agrarian Reform, of Energy, of Public Works and Highways, of Migrant Workers and of Transportation discussed updates on their respective agencies’ budget utilization, delivery of social services and catch-up plans.
The Department of Budget and Management (DBM) last week said government spending in the first six months of 2023 was at P2.411 trillion, which is P170.5 billion or 6.6 percent below the P2.582 trillion programmed for the period.
The President directed all government agencies to keep track of their budget use and maximize spending on areas of priority as the DBM proposed measures to accelerate government spending.
The low disbursement of government agencies are due to procurement-related difficulties, substantial outstanding checks recorded as of the end of June 2023, and billing concerns from suppliers or creditors, among others. – Angela Celis and Jocelyn Montemayor
