Philippines to miss GDP growth target for 2014

The government would miss its target of growing gross domestic product (GDP) by 6.5 to 7.5 percent this year after the country posted slower economic growth in the third quarter, analysts said Thursday.
Analysts said the Philippine government will manage to increase GDP by around 6 percent, if not lower, this year.
University of the Philippines economist and former budget secretary Benjamin Diokno said under-spending by the government is mostly to blame for the disappointing GDP figure in the July to September period.
"(Under-spending) is because of poor budget planning and incompetence," Diokno said.
He said under-spending or the difference between planned against actual spending has been estimated at 594 billion pesos ( 13.22 billion U.S. dollars). For this year alone, under-spending as of end-September was at 274 billion pesos (6.1 billion U.S. dollars).
ING Bank Manila senior economist Joey Cuyegkeng said he is not optimistic that the government's spending will rebound in the fourth quarter.
Cuyegkeng said challenges posed by the unfavorable Supreme Court ruling on the Disbursement Acceleration Program (DAP) and other budget issues have left the government stumped as to how it can play catch up with its full-year fiscal program.
With this, he expects full-year growth to settle at 5.8 percent this year and fourth quarter economic growth to reach 5.9 to 6 percent.
"Optimism of a rebound in government spending is fading. I am not as optimistic about a surge in government spending but I would wait for the October fiscal performance," said Cuyegkeng.
University of Asia and the Pacific economist Victor Abola said that apart from under-spending, congestion of major ports in the Philippine capital region of Metro Manila had an impact on the country's economic performance in the third quarter.
Abola said port congestion affected the country's trade. Export growth slowed to 9.8 percent in the third quarter from 12.4 percent recorded a year ago.
Socioeconomic Planning Secretary Arsenio Balisacan, however, remains optimistic about the country's economic prospects. Balisacan said a 6.6 to 6.8 percent growth in the fourth quarter is "very doable" but this would allow full-year growth to settle at only 6 percent, which he said is a "more realistic" estimate.
"To hit 6.5 percent, you need to grow by more than 8 percent or 9 (percent) in the fourth quarter. Of course that's still possible but I look at the previous quarters, there was only one time in the last 10 years that we posted an 8-percent growth," said Balisacan.
The Philippine Statistics Authority said Philippine economic growth slowed to 5.3 percent in the third quarter as the expansion of all major economic sectors decelerated during the period.
The statistics agency said GDP growth in the July to September period is lower than the 6.4 percent recorded in the second quarter and the 7 percent posted a year ago.