Elections to boost 2012, 2013 Philippine economy - Abad
MANILA, Philippines - Election spending is going to be one of the biggest contributors to economic growth this 2012 and 2013, giving the government confidence that it may exceed existing growth targets.
The official economic growth targets are set at 5% to 6% in 2012 and 6% to 7% target in 2013.
In an interview on Monday, October 1, Budget Secretary Florencio B. Abad said with the 2013 mid-term polls just around the corner, the country may already see some election spending toward the end of the year.
Abad said this will be on top of the holiday consumer spending that Christmas and New Year usually contribute to the growth of gross domestic product (GDP), which measures the local economy. Total consumption traditionally accounts for around 70% of GDP.
The 2010 growth of 7.3% -- the highest in 34 years -- should be instructive, said Abad. That year was another election year.
"I don't know to what extent [election spending will boost 2013 economy], but you saw 2010," the Cabinet member said.
Consumption is key
In the first 6 months of 2012, the economy already grew 6.1%, higher than the full-year target of 5% to 6%.
To meet the year's target, the local economy only needs to grow 4% at the least in the June to December period.
Abad said he is banking not only on the strong holiday consumption and election spending toward the end of the year, but also on government's own spending, especially in infrastructure projects.
He said the government still has a lot of funds to spend. By end-August, the government spent only 85% of its budget.
Some of these upcoming expenses will be on social and infrastructure projects under the Aquino government's Public Private Partnerships (PPPs) scheme.
"The President has grounds to be optimistic. The preparations for the elections and the rollout of the PPPs, he has firm basis for projecting something optimistic. We just want to be able to target at least the high end," Abad said.
"Christmas is the time where Christmas and campaigning mix...The rush for spending for Christmas and preparations for the elections will further boost the economy," he added. - Rappler.com