Public-Private Partnership Center

Noting that robust consumer spending has been a pillar of economic growth, Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa C. Guinigundo said that “7%-8% [gross domestic product growth] is possible, but the challenge is for the government and the private sector to leverage on [sic] market confidence” to bring in more investments.

Gross domestic product (GDP) expanded by 4.9% in the first quarter. The government has set a 5%-6% growth assumption for budget planning this year, separate from its 7%-8% “fighting target.”

Referring to the government’s public-private partnership (PPP) initiative, which has seen some delays, Mr. Guinigundo said, “If the public-private (partnership program) is put on stream, domestic capital formation and construction will also help (output) go up.”

Mr. Guinigundo clarified that “actual investments” need not start in order to “generate economic activity,” saying that mere talk on these projects is a “signal” that moves the market. “Vertical and horizontal integration such as metal, electronics, cables for shipbuilding” will fuel growth,” he said. “…it is not really the direct opportunity that comes out of that PPP project.”

Sought for comment, University of Asia and the Pacific economist Cid L. Terosa said by phone yesterday, “I agree with the BSP that investments are needed…it has a great multiplier effect because it may come from infrastructure development and social spending.”

He said, however, that 7%-8% growth may no longer be possible. “A 6% growth is achievable, but not 7%-8% due to underspending…”