by: Sarah Joson
Tuesday, October 13, 2015 |
Research, risk analysis, and credit rating agency Moody’s Investor Service stated that they expect the Philippine government to increase spending in the last few months of 2015 to boost economic growth.
Moody’s revealed in their report that the Philippines’ gross domestic product could grow below the previous projection of 6.7 percent to just 5.7 percent this year. The agency explained that poor public spending and slow export growth affected the economic output of this year’s first half.
Another factor indicated in the report is the effects of the El Niño to the agricultural production of the country - which further weighed down on the 5.7 percent GDP forecast. Still, Moody’s is expecting that infrastructure development spurred by the public-private partnership program and improved fiscal disbursements will pick up in the second half of the year.
The debt watcher was also seen slashing its economic growth projection for the Philippines for this year and 2016 due to external headwinds such as the weaker demand in China.
Weak global demand and poor public spending are said to have contributed to the slower economic growth of the country - from the 6.4 percent last year to 5.3 percent this year.
The Philippines is eyeing a GDP growth of 7-8 percent this year, but according to Socioeconomic Planning Secretary Arsenio Balisacan, the country could only achieve growth between six and 6.5 percent this year.
World Bank was also seen cutting its economic growth forecasts for the Philippines for this year and the next two years from its initial estimate of 6.5 percent to just 5.8 percent, also prompted by weak government spending.
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