2018 GDP goal still achievable – DoF
This year’s economic growth target can still be hit if capital formation substantially picks up in the last six months of 2018, a senior Finance department official said.
Finance Undersecretary Gil Beltran told reporters that with gross domestic product (GDP) growth at a cumulative 6.3 percent in the first half, a 7.7-percent expansion is needed in the second semester to be able to achieve the lower end of the 7.0-8.0 percent target for 2018 to 2022.
“It is still possible if we get 30- to 40-percent increase in capital formation in the third or fourth quarter. Usually we get that in the first two quarters,” Beltran said.
“We achieved that under the administration of former President Gloria Macapagal-Arroyo. So it’s not new. We have to push capital formation further because during those years that we achieved 7.7 to 7.8 percent growth we had a 30- to 40-percent increase in capital outlays,” Beltran added.
“Right now we are about 20 percent so we will need to work harder.”
GDP growth slowed to 6.0 in the second quarter from 6.6 percent three months earlier, a result the Finance department said had a “silver lining” as 28.6-percent growth in durable equipment had supported capital formation, which rose by 20.7 percent.
“These imply that the economy will be able to recover lost ground in the next quarters as the equipment and factories set up in the second quarter will start operations,” it claimed.
The department also said that a growing services trade surplus would sustain the rise in the goods trade deficit.
The “government is keeping its eye on the bigger picture, that is that growth, if it is to remain sustainably high, should be driven by investment.”
“Government should keep its focus on enhancing the country’s long-term prospects by increasing the economy’s productive capacity (through infrastructure and social services) while maintaining macroeconomic stability,” the Finance department added.
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