Business exec warns vs relying 'entirely on PPPs'

DEPENDING on public-private partnerships (PPPs) will not be enough to achieve the country's growth targets, the country manager of office solutions provider International Workplace Group (IWG) claimed on Thursday.

"The government spending has to be there because that government spending is investments," IWG's Lars Wittig told a Manila Times economic forum.

"If they (the government) rely entirely on PPPs, then we're looking at some delays. They need to crack the code to execute faster," he added.

IWG Country Manager Lars Wittig PHOTOS BY J. GERARD SEGUIA

Philippine economic growth was a lower-than-expected 5.7 percent in the first quarter and was also below the government's downwardly revised 6.0- to 7.0-percent target.

Wittig said the government would only be able to hit the target if it delivered on promises to ramp up spending.

"They are underspending, and I can't stress it enough, they need to invest more and faster," he said.

"There's no reason for the government deficit to be declining as a percent of GDP (gross domestic product), as is the case right now," Wittig added.

"Nobody ever asked them to do that, including all of the recognized international institutions who we like to listen to. Nobody has told them that it's a good idea," he continued.

"If they don't spend enough, that could be a reason why we might be surpassed by other nations in the region."

Government final consumption expenditure was just 1.7 percent higher in the first quarter compared to 6.2 percent a year earlier based on Philippine Statistics Authority data.

A 7.1-percent contraction in the second quarter of 2023 plus a narrower 1.0-percent drop in the fourth quarter have been blamed for full-year GDP growth of 5.5 percent, below the year's 6.0- to 7.0-percent goal.

The deficit-to-GDP ratio, meanwhile, stood at 4.46 percent as of end-March, down from 4.82 percent a year ago and the 6.2 percent at the end of 2023. It was also below the 5.6-percent cap set by the government for 2024.

The government's budget balance swung into a surplus in April at P42.7 billion, a reversal from March's P195.9-billion shortfall but lower than the year-earlier surplus of P66.8 billion.

Year to date, the budget balance remained in deficit at P229.9 billion, slightly higher than the P204.1 billion recorded in January-April last year.