Socioeconomic Planning Secretary Arsenio M. Balisacan yesterday said the economy can sustain a 7-8 percent annual growth provided both public and private sectors fix the two major constraints to this growth, one of these being the power supply.
“To sustain 7-8 percent growth for the medium term you have to address the infrastructure bottlenecks and that includes power,” Balisacan told reporters on the sidelines of the Management Association of the Philippines’ general membership meeting. “Obviously, in the manufacturing and tourism sectors, (supply of) power is an important concern.”
Balisacan reiterated his concerns about the looming power crisis and its potential effects in the GDP growth projection which is 6.5 percent to 7.5 percent for 2014.
“The data we’re seeing and what we have been assured by Secretary Petilla (DOE Secretary Jericho Petilla) is that we have energy coming in,” said Balisacan. “We want to have reserves as high as possible because the thing about power is you cannot over do it, it’s very expensive so (has to be) that the supply and demand of power is properly managed.”
He emphasized that the whole government focus right now is to ensure sustainability of growth by making sure power supply does not ran out. “We are addressing this in government but there are still power shortage problems in Mindanao and we don’t know if we have enough supply after 2015 or (if we need) to invest more in the power sector.”
“It’s not enough to be comfortable because the reserves are still thin. We need a lot of investments to go into power,” added Balisacan. Other than power, a major constraint to sustainable GDP expansion is the inefficient regulatory system and this includes the taxation regime.
The power situation, however, is more worrisome for the National Economic and Development Authority chief than the impact of last year’s typhoon Yolanda’s destruction on the GDP.
In fact for the first quarter growth, Balisacan said it could go anywhere from 6.5 percent to 7.5 percent. “I’m happy with that (but) we don’t know yet and we don’t have the numbers and indicators (for January to March).”
The rate of economic expansion will depend on how fast the government can spend for the rehabilitation. “We’re hoping that for the remaining period that spending can still accelerate but I expect that since the (rehab) funds have already moved out it will be just a matter of time that those funds are (implemented) in those areas. That would offset the negative effects of the destruction of the assets and infrastructures there (typhoon hit areas) and in the GDP for the region.”
For 2014, Balisacan said the 6.5 percent to 7.5 percent full year GDP projection is still achievable. “There will be no adjustment for the official targets, we can achieve that. We will not put it there if we can’t do it (but) we have to back that up with an infrastructure program.” source
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