Demonstrating its commitment to ramp up economic growth through efficient public spending, improved governance and key policy reforms, the Aquino administration posted a 6.4-percent rise in the country's real Growth Domestic Product (GDP) in the first quarter, up from the 4.9-percent rate reported in the same period in 2011.
"The remarkable increase in the country's GDP for the first quarter is proof that good governance — coupled with a dedicated reform platform and sound financial management — is not merely related to economic growth, but is instead intimately tied to it. These positive figures reaffirm exactly what this Administration has long believed in: kung walang corrupt, walang mahirap," Budget and Management Secretary Florencio Abad said.
According to Abad, National Economic and Development Authority (NEDA) chief Arsenio Balisacan confirmed that real GDP growth in the first quarter was driven further by accelerated government spending, particularly in public construction activities, which rose to 62.2 percent from the Q1 2011 figure of 37.9 percent. Overall, government consumption registered at a high 24 percent, a significant increase from last year's contraction of 15.8 percent.
"We are pleased to note that vigorous public spending in the first quarter of the year contributed greatly to GDP growth. In January this year, we undertook critical measures to fast-track public spending, beginning with early, comprehensive releases to all agencies. Strong budgetary support for infrastructure initiatives — spending for which had grown by 59 percent in the first quarter — was also crucial, as were the effects of the Disbursement Acceleration Plan (DAP) implemented in late 2011," Abad said.
First-quarter growth was further buttressed by government spending for key antipoverty and social programs, including the Conditional Cash Transfer program of the Department of Social Welfare and Development (DSWD), salary increases pushed by the Aquino administration under the Salary Standardization Law III, and priority programs for rice and other agricultural products.
Abad further noted that robust government consumption was fueled by speedy releases for Maintenance and Other Operating Expenditures (MOOE) and landmark budgetary reforms advanced by the Department of Budget and Management (DBM).
"Our reform-oriented budget management approach bolstered expenditure efficiencies in government. This involved the fine-tuning of budget execution rules to facilitate quicker spending and the disaggregation of lump-sum funds, among others. In addition, we continue to push for other groundbreaking reforms, such as bottom-up budgeting and treating the General Appropriations Act as a release document," Abad said.
He noted that the DBM will increase pressure on departments and agencies to accelerate the movement of obligations and disbursements. Unobligated funds for projects will be allotted instead to fast-moving projects to sustain the current expenditure pace.
"We expect to further boost the present momentum for government consumption through intervention measures for line agencies. This will allow us to clear bottlenecks in fund disbursements so that agencies can speed up the implementation of their programs and projects and meet their scheduled deadlines," Abad said.
"There is much to be optimistic about. The extraordinary growth of our economy in the first quarter augurs well for the rest of the fiscal year, especially in view of Moody's credit upgrade for the Philippines and recent successes in our anti-corruption campaign. We have little doubt that spending in the next three quarters will continue its strong trajectory, and that this—together with the Administration's antipoverty and good governance drive—will ultimately lead to direct, immediate, and sustainable benefits to all Filipinos," he added.
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