Q1 spending slashed due to budget delay
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Sun, 27 Jan 2019 16:16:07 +0000
The government will be unable to spend a programmed P46 billion during the first three months of the year given the delay in the passage of the 2019 budget, a Cabinet official claimed.
“I just computed it; the budget delay cost the government P46 billion for the first quarter. In other words, we cannot spend P46 billion of what we planned to do,” Finance Secretary Carlos Dominguez 3rd said at the sidelines of the central bank’s annual reception for the banking community last Friday.
“You know how much P46 billion is? Half a billion a day. So that is the amount of money that is not circulating, that is not going to serve the public with infrastructure projects, etc.,” he added, also saying that this would subsequently weigh on the country’s economic growth.
“This is the best time to start projects. So you missed that. So our GDP (gross domestic product) for the Q1 (first quarter) is certainly going to be affected,” Dominguez said.
The government is aiming for 7.0-8.0 percent GDP growth this year. This means that the economy, which expanded by a below-target 6.2 percent last year, should grow by 7.0 percent per quarter to hit at least the lower end of the 2019 goal.
The government is currently operating on a re-enacted budget after Congress failed to pass the proposed P3.7570-trillion 2019 General Appropriations Act (GAA) before the end of last year. The delay, blamed on factors such as the late submission by the House of Representatives and questions over alleged insertions, has already led to the shelving of mandated pay hikes for government workers.
Under a reenacted budget, no new projects can be awarded until Congress approves — and President Rodrigo Duterte subsequently inks into law — this year’s GAA, the Budget department has said.
In a recent statement, the department underscored that Circular 09-2018 issued by the Government Procurement Policy Board states that “activities or projects that are included in the FY (fiscal year) 2019 NEP (National Expenditure Program), hence not part of the FY 2018 GAA, may be awarded on the basis of the FY 2019 GAA.”
“New projects will have to wait until the passing of the GAA before they can have their contracts awarded. We still encourage them, however, to conduct early procurement activities if they have not done so,” Budget Secretary Benjamin Diokno has said.
The Senate last week approved its version of the budget bill and a bicameral conference committee will begin the process of crafting a reconciled measure.
Sen. Loren Legarda, chair of the Senate finance committee, said the goal was to have the final bill approved before Congress adjourns for the mid-term elections and to have Duterte sign it by February 14.
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