Abad: Reforms In Government Spending Enabled PH Economy To Grow By 5.8% In Q4 2015

The Department of Budget and Management said that reforms in government spending have enabled the country’s economy to grow by 5.8 percent in the fourth quarter (Q4) 2015.

“In particular, government final consumption expenditure grew by 9.4 percent last year, compared to a measly 1.7 percent in 2014; and public construction increased by a whopping 20.6 percent, against the 6.3-percent growth registered in 2014,” DBM Secretary Florencio “Butch” Abad said in a statement.

Abad attributed the improvements to two main factors: 1) the substantial increase in infrastructure spending over the last five years and 2) reforms made in strengthening Public Financial Management and accelerating budget execution.

Abad said the increase in infrastructure spending was made to address infrastructure challenges and keep up with other ASEAN emerging economies which spend a higher percentage of their gross domestic product on infrastructure.

“The higher requirements for infrastructure upgrading and reconstruction have helped keep government consumption growth robust,” Abad said. “We can expect higher growth for 2016 as the upgrading of all national roads and bridges are completed at the end of the year.”

Meanwhile, improving Public Financial Management and accelerating budget execution yields to faster disbursements and higher fund utilization.

“Faster disbursements for Infrastructure and other Capital Outlays helped raise national government disbursements to P291.3 billion as of November 2015,” Abad said. This is a 23 percent year-on-year increase from 2014.

Abad said this reflects the improved capacity of government agencies to utilize their budgets and deliver much-needed services. (PIA/DBM)