Duterte admin has enough fiscal space to grow – DOF

The incoming administration of President-elect Rodrigo Duterte has enough room for fiscal policy adjustments in growing the economy, the Department of Finance (DOF) said Friday.

"The Philippines has sufficiently freed itself from structural and fiscal constraints for the next administration to continue ramping up productive investments in infrastructure and social services for the medium-term horizon," the DOF said.

Outgoing Finance Secretary Cesar Purisima said the past six years of the Aquino administration has built the right foundations for wider policy options to sustain growth.

The Duterte administration will inherit a sizeable budget and ample funds as it comes to office in the second half of 2016, Nicholas Antonio Mapa, economist at Bank of the Philippine Islands, told GMA News Online.

"The challenge of course is if the incoming administration can get the line agencies to spend money efficiently and timely," Mapa noted.

Purisima extended his support to the next administration following its economic team's announcement to accelerate spending, raise the deficit ceiling, and borrow more to finance its economic agenda.

The outgoing Finance chief is convinced that enough fiscal space has been amassed for the government to support a more expansionary fiscal policy stance, DOF said.

"With the country hailed as the most upgraded investment-grade sovereign, the next administration is likewise in a position to tap the markets to finance aspirational growth requirements if needed," Purisima said.

"With a record debt-to-gross domestic product level of 44.8 percent in 2015 and low weighted average interest rates, the Philippines has reasonable room to maneuver," he added.

The outgoing finance chief is confident that the incoming economic team has the experience and expertise to "navigate a fiscally sustainable path."

Several business groups are also optimistic about Duterte's economic managers.

The Aquino administration thought it had enough funds at its disposal, but its adherence to clean implementation slowed government spending, Mapa noted.

"So it will be interesting to see if the incoming administration is able to spend efficiently and quickly but still corruption free," the economist said. – Ted Cordero/VDS, GMA News