Philippine Government Underspending to Drag GDP Growth

Weak spending by the Philippines government persisted in June despite the approval of the 2019 budget, stoking fears it would continue to weigh on economic growth. Spending catch-up plans don’t seem to be moving funds fast enough, while local governments are likely busy with their post-election transitions, according to Euben Paracuelles, chief ASEAN economist at Nomura Singapore Ltd. He said that trend poses a downward risk to his forecast for 5.8% gross domestic product growth in the second quarter, which would be a slight improvement from the first quarter’s four-year low of 5.6%.