{"id":18828,"date":"2024-05-20T03:00:56","date_gmt":"2024-05-20T03:00:56","guid":{"rendered":"https:\/\/energybuzz.ph\/staging\/6915\/phl-needs-at-least-6-1-growth-to-meet-target-say-analysts\/"},"modified":"2024-05-20T03:00:56","modified_gmt":"2024-05-20T03:00:56","slug":"phl-needs-at-least-6-1-growth-to-meet-target-say-analysts","status":"publish","type":"post","link":"https:\/\/energybuzz.ph\/staging\/6915\/phl-needs-at-least-6-1-growth-to-meet-target-say-analysts\/","title":{"rendered":"PHL needs at least 6.1% growth to meet target, say analysts"},"content":{"rendered":"
\n

By Beatriz Marie D. Cruz, <\/b>Reporter <\/i><\/p>\n

THE PHILIPPINE ECONOMY <\/span>must grow by an average of 6.1% for <\/span>the rest of the year to meet the low<\/span>er end of the government\u2019s <\/span>6-7% <\/span>target, the Department of Finance <\/span>(DoF) said over the weekend. <\/span><\/p>\n

\u201cWe need 6.1% [growth] for the rest of the year to actually reach the 6% target. I think that\u2019s very achievable,\u201d Finance Undersecretary and Chief Economist Domini S. Velasquez said during a forum organized by the Economic Journalists Association of the Philippines and San Miguel Corp.<\/p>\n

The Philippine economy expanded by 5.7% in the f<\/span>irst quarter, slightly faster than 5.5% in the previous quarter, but below the government\u2019s 6-7% target band.<\/p>\n

For the coming months, the DoF expects higher spending and declining inflation to drive growth.<\/p>\n

\u201cWe expect that consumption will increase as in<\/span>f<\/span>lation continues to moderate,\u201d Ms. Velasquez said.<\/span><\/p>\n

Household consumption, which accounts for about 80% of GDP, grew by 4.6% in the January-to-March period, the slowest since the coronavirus pandemic. It was also weaker than 5.3% in the fourth quarter and 6.4% in the same period last year.<\/p>\n

\u201cOnce we have a bit of stable inflation, we do think that this will increase and it will prop up growth because those are the heavy lifters of growth,\u201d Ms. Velasquez said.<\/p>\n

Calixto V. Chikiamco, Foundation for Economic Freedom (FEF) president, said f<\/span>irst-quarter consumption was hampered by rising prices of food.<\/p>\n

\u201cThe government needs to tackle the high food prices, which are discouraging consumption, and also forcing the BSP (Bangko Sentral ng Pilipinas) to maintain higher interest rates for longer, despite slowing inf<\/span>lation,\u201d he said in a Viber message.<\/p>\n

Last week, the BSP\u2019s Monetary Board maintained its target reverse repurchase (RRP) rate at a 17-year high of 6.5% for a f<\/span>ifth straight meeting.<\/p>\n

However, he noted a proposed amendment to the Rice Tariff<\/span>ication Law authorizing the NFA to directly import rice \u201cwill only exacerbate the def<\/span>icit but will also be inef<\/span>fective.\u201d<\/p>\n

The House of Representatives is expected to approve the measure on third reading this week.<\/p>\n

To tame food prices, Mr. Chikiamco called on the government to further cut rice tarif<\/span>fs to 10% from 35%, and expand the Minimum Access Volume for corn, chicken and pork.<\/p>\n

SPENDING
\n<\/b>Government spending is expected to pick up for the rest of the year, Ms. Velasquez said, after slowing to 1.7% in the f<\/span>irst quarter.<\/p>\n

Faster exports and an improving job market should also sustain the economy\u2019s growth prospects, Ms. Velasquez also noted.<\/p>\n

\u201cChina is showing signs of recovery which will benefit the Philippines. Additionally, the global outlook for the technology sector is positive, which will benef<\/span>it exports of semiconductors,\u201d she said.<\/p>\n

Ms. Velasquez said the Philippines will also benefit as global sales of semiconductors are projected to increase this year.<\/p>\n

However, she noted that growth in the manufacturing sector is being hampered by high power costs, which would be addressed by the passage of the CREATE MORE (CREATE to Maximize Opportunities for Reinvigorating the Economy) bill.<\/p>\n

Under CREATE MORE, corporations will be granted a 200% deduction for power costs incurred during the Income Tax Holiday period.<\/p>\n

Security Bank Corp. Chief Economist Robert Dan J. Roces said the government should ramp up infrastructure spending, attract more private sector investments, and support high potential sectors like agriculture and manufacturing to reach their targets.<\/p>\n

\u201cThe government can bolster its spending to contribute to growth by prioritizing high-impact infrastructure projects, improving budget execution, encouraging public-private partnerships, providing targeted support to key sectors, and investing in social infrastructure,\u201d he said in a Viber message. <\/span><\/p>\n

There are currently 185 infrastructure f<\/span>lagship projects worth P9.14 trillion in the pipeline, according to the National Economic and Development Authority.<\/p>\n

However, Ateneo de Manila economics professor Leonardo A. Lanzona said the government appears to be focusing on inflation as the main constraint to growth.<\/span><\/p>\n

\u201cBut that is not true. Growth can be achieved even in the midst of inf<\/span>lation which to some extent can be a consequence of growth,\u201d he said in a Facebook Messenger chat.<\/p>\n

He cited Japan and Singapore, which implemented policies to support domestic production particularly in high-tech industries, which helped grow their respective economies amid high inflation and interest rates.<\/span><\/p>\n

\u201cThe Philippines is an interesting case since economic growth was lower than expected and yet inf<\/span>lation remained high. This suggests the beginnings of stagf<\/span>lation,\u201d Mr. Lanzona said.<\/p>\n

\u201cThe incapacity of the institutions to adapt to changing conditions and the insistence that things are \u2018business as usual\u2019 has led to poor policies and the failure to maximize the full potential of the Filipino.\u201d<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

THE PHILIPPINE ECONOMY must grow by an average of 6.1% for the rest of the year to meet the lower end of the government\u2019s 6-7% target, the Department of Finance (DoF) said over the weekend.<\/div>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","footnotes":""},"categories":[1],"tags":[4391,15744,14644,11413,5645,1192,3851,11354,4013,935],"class_list":["post-18828","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-6-1","tag-analysts","tag-bworldonline","tag-growth","tag-least","tag-meet","tag-needs","tag-phl","tag-say","tag-target"],"yoast_head":"\nPHL needs at least 6.1% growth to meet target, say analysts - Energy Buzz<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/energybuzz.ph\/phl-needs-at-least-6-1-growth-to-meet-target-say-analysts\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"PHL needs at least 6.1% growth to meet target, say analysts - 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