Finance Secretary Benjamin Diokno expects a better economic performance in the second semester of the year as line agencies implement their spending catch-up plans.
“The second half performance of the economy will be much better than the first half,” Diokno said in a press briefing last Friday.
“Historically, the fourth quarter is where most infrastructure projects are done since there aren’t too many typhoons in the fourth quarter,” he added.
The economy’s first semester average growth rate was 5.3 percent after the contraction in government spending led to a slowdown in growth in the second quarter of the year.
To achieve the government’s target growth rate of six to seven percent for 2023, the country’s gross domestic product needs to grow by at least 6.6 percent in the second half of the year.
Diokno said during the Economic Development Group (EDG) meeting held last week, the status of major programs and projects of selected national government agencies were discussed.
“Given that lower government spending was one of the main reasons for the slower economic growth in the second quarter, the EDG requested some selected agencies to present their quarterly disbursement amounts and rates for the year to date, issues encountered why there was below target disbursements, expected disbursement rates by year-end and historical disbursement rates. The agencies that were requested to present are those with the biggest allocation of budget, but with less than 40 percent utilization rate based on the latest available 2023 data,” Diokno said.
The government agencies that were identified include the Departments of Public Works and Highways, Transportation, Health and Social Welfare and Development.
“Some of the main challenges identified by the presenting agencies are the seasonality in project implementation with higher disbursements expected in Q4 2023, take-up of beneficiaries, preparatory activities for procurement, and implementation problems and payment issues,” Diokno said.
“In support of the agencies’ drive to improve government spending, the Department of Budget and Management has committed to consolidate and help agencies in the implementation of action points in order to achieve the year-end disbursement targets,” he added.
In the same press briefing, Zeno Abenoja, finance undersecretary, said with the implementation of the catch-up spending plans, there could be a significant improvement in the disbursement rate by the end of the year.
“Of course, there will still be a lot of uncertainty, but certainly the trajectory is a significant improvement from the performance as of the middle of this year,” Abenoja said.
Meanwhile, Diokno was also asked about the implemented rice price ceiling which was already lifted by the President.
“It was done at the time that we didn’t have sufficient supply. Now, the harvest has started, and a lot of imports are coming in. So I think the decision to lift was just right,” Diokno said.
The finance chief said the rice hoarding has also been addressed, while the seized smuggled rice has already been distributed.
“So there’s a lot of rice now in circulation,” Diokno said.
