The Marcos administration should increase government spending to help spur economic activities amid a slower growth rate in the first quarter of the year, veteran lawmaker and economist Representative Joey Salceda said Thursday.
Salceda, chairperson of the House ways and means committee, made the call after the country posted a 6.4% gross domestic product growth, its slowest in seven quarters.
"I still believe that we need a spending catch-up plan to release funds for projects faster next quarter,” he said in a statement.
“If you disaggregate the components of the economy, real growth in government final consumption expenditure is 6.2%, [which is] below the general economy," he added.
The lawmaker added that without "robust capital formation," which grew by 12.2% from private sector investments, the GDP growth would have been slower.
“The private sector, in other words, is carrying the day. But you have to remember that it is very sensitive to interest rate fluctuations, and this is a very volatile global environment,” he said.
Salceda said that household consumption growth at around 6.3% is even higher than government's final consumption expenditures.
“The consumption growth was also partly driven by above-normal OFW remittances. The government should not count on the same figure persisting. [While the] Net Primary Income (NPI) from the Rest of the World increased by 81.2 percent year-on-year, you can’t always count on that happening,” he said.
Salceda cited that to maintain the 2022 spending levels, the national government needs to release expenditure levels in millions.
Based on the National Government’s Cash Operations Report, the total national government expenditures for the first quarter are down by 1.06 percent from 1.10 trillion in 2022, to 1.089 trillion in 2023.
“Given inflation, to maintain the same level of real expenditures from 2022 to 2023, total Quarter 1 spending should have been at least P1.19 trillion in 2023. This indicates that in real terms, Quarter 1 GDP spending is actually down by 8.55 percent,” he said.
“The earlier you release funds for government projects, the more benefits you reap from them during the year,” he added.—LDF, GMA Integrated News