Holiday spending, PH gov’t catch-up outlays seen to boost economic activity

MANILA – The holiday season will help boost consumer spending and overall economic activity, an economist from Rizal Commercial Banking Corporation (RCBC) said on Tuesday.

In an interview with PTV Philippines, RCBC chief economist Michael Ricafort said business activities will likely pick up by the end of the year due to consumer spending during the Christmas season.

Philippine economic growth slowed down in the past two quarters of the year due to the combined effects of the flood control issue and prolonged conflict in the Middle East.

Ricafort said, however, that the government’s catch-up spending especially on critical infrastructure projects will help boost economic growth in the coming months.

“’Yung economic growth natin bibilis lang talaga kapag tuloy na tuloy na yung catch-up spending. (Our economic growth will really accelerate if the catch-up spending continues),” he said.

He said the 2.6 percent average economic growth in the first two quarters of the year is “unusual.”

“Nakasanayan yun ng buong mundo kasi ang economic growth natin one of the fastest in Asia and even among relatively larger countries around the world, mga nasa 5 percent to 6 percent. (The entire world was used to that, because our economic growth which is around 5 to 6 percent, is among the fastest in Asia and even among relatively larger countries globally),” Ricafort said.

Ricafort said passing key legislative reforms such as such as the Anti-Political Dynasty Bill and party-system reforms are also needed to improve investor confidence.

The RCBC economist however noted that the inflation remains elevated at 7.2 percent, mainly due to the increase in food and fuel prices.

Since the country heavily relies on imported fuel, Ricafort urged the government to accelerate the rollout of renewable energy and electric vehicle adoption.

He said boosting the productivity of the agriculture sector is also needed to increase production and lower food prices.