Q3 underspending to 'temporarily’ drag growth—Recto

GOVERNMENT UNDERSPENDING in the third quarter, mainly due to a corruption crackdown that curbed public disbursements, is expected to temporarily dent economic growth this year, Finance Secretary Ralph G. Recto said.

- By Aubrey Rose A. Inosante Reporter

"This (underspending in the third quarter) is expected to temporarily weigh on government final consumption expenditure and the overall GDP (gross domestic product) growth," he told BusinessWorld in a Viber message on Oct. 31.

The Marcos administration only disbursed P1.46 trillion in the third quarter, data from the Bureau of the Treasury showed, P141.73 billion less than its P1.6-trillion program for the period. This is mainly due to lower spending by the Department of Public Works and Highways, which is at the center of a corruption scandal involving flood control projects.

"Nevertheless, the government’s swift and decisive action following the recent flood control controversy marks the beginning of a major government cleanup that will lead to stronger institutions, better governance, and faster growth in the medium term," Mr. Recto said.

President Ferdinand R. Marcos, Jr. had flagged anomalous flood control projects during his State of the Nation Address in late July. This sparked several investigations into alleged corruption involving lawmakers, government officials, and private contractors.