Philippine Senate Panel Eyes Measures to Boost Spending After Dismal Q3 GDP Growth
Key Takeaways
- •The Philippine economy grew 2.1% in the third quarter, its weakest performance since the COVID-19 pandemic, when GDP contracted 3.8% in the first quarter of 2021.
- •Senate President Sherwin T. Gatchalian attributed the slowdown to elevated energy costs and the impact of a very strong El Niño on local productivity.
- •The ad hoc Committee on Reinvigorate Investment and Sustainable Economic Growth will focus on accelerating spending, particularly on infrastructure projects, while prioritizing social protection programs for vulnerable sectors.
- •Because government expenditure is one of the components of GDP, accelerated outlays on infrastructure and social programs are counted within the headline growth figure the committee is trying to lift.
- •The Senate will prioritize proposed budget line items that positively affect ordinary Filipinos' daily lives, with funding decisions to be shaped as deliberations on the spending program proceed.
A special Philippine Senate committee will prioritize calibrated policy interventions to accelerate spending and stimulate the economy following the "dismal" 2.1% gross domestic product (GDP) growth recorded in the third quarter, Senate President Sherwin T. Gatchalian said on Monday.
"The dismal 2.1% GDP growth in the 3rd quarter demands a need for an aggressive pump priming of the local economy," Mr. Gatchalian said in a statement.
Pump priming refers to the use of government expenditure to stir economic activity — a tool that sits squarely within the legislature's reach through its authority over the national budget.
The reading marks the Philippine economy's weakest performance since the COVID-19 pandemic, when GDP contracted by 3.8% in the first quarter of 2021.
Mr. Gatchalian attributed the slowdown to elevated energy costs and the impact of a very strong El Niño on local productivity. El Niño is a climate pattern marked by unusually warm waters in the Pacific that typically brings hotter, drier weather to the Philippines.
In response, the Senate president said the ad hoc Committee on Reinvigorate Investment and Sustainable Economic Growth will focus on accelerating spending, particularly on much-needed infrastructure projects, while prioritizing social protection programs for vulnerable sectors.
The spending focus is significant because government expenditure is one of the components that make up GDP, meaning accelerated outlays on infrastructure and social programs are counted within the same headline figure the committee is trying to lift. The budget is the practical channel for that push: as the chamber reviews the proposed spending program, line-item decisions shape which projects and programs receive resources.
He added that the Senate will also prioritize funding line items in the proposed budget that would have a positive impact on the daily lives of ordinary Filipinos, saying there should be no more excuses when it comes to addressing citizens' needs. — Francessca S. Abalos
Attention now turns to how the committee's priorities are reflected in the proposed budget as deliberations proceed, particularly which infrastructure projects and social protection programs receive funding.
Source: BusinessWorld Online
