Reenacted budget to stunt economy
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Wed, 13 Mar 2019 16:25:12 +0000
NEDA chief warns growth could slow to 4.2-4.9 percent this year
Philippine economic growth will decelerate sharply under a full-year reenacted budget, the National Economic and Development Authority (NEDA) warned on Wednesday.
Socioeconomic Planning Secretary Ernesto Pernia, in a statement, said 2019 gross domestic product (GDP) growth could slow to “as low as 4.2 to 4.9 percent” if the government is forced to operate on last year’s outlay.
Pernia’s warning came as the House of Representatives and the Senate remain at loggerheads over the P3.757-trillion 2019 budget, with the latter accusing the former of making post-bicameral conference committee changes.
A meeting arranged by President Rodrigo Duterte on Tuesday failed to resolve the impasse and Duterte was said to have told House leaders that he would not sign the proposed General Appropriations Act (GAA) if it was not endorsed by the Senate.
The government has been operating on last year’s P3.767-trillion budget since the start of the year. While larger, agencies can only spend for items detailed in the 2018 outlay and cannot embark on programs and projects supposed to be implemented this year.
With the first quarter all but over, Pernia presented other scenarios where the 2019 budget could be passed later in the year.
“[I]f the budget is passed in August, expect growth to be around only 4.9 to 5.1 percent,” he said, while approval next month could result in a 6.1-6.3 percent expansion.
All three estimates fall well below the government’s downwardly revised 6.0-7.0 percent target (see story on this page). If the full-year reenactment or August approval scenarios are realized, the slowdown would result in the lowest GDP growth since 2011’s 3.7 percent.
Pernia stressed that a reenacted budget would delay infrastructure projects as well as the delivery of public social services such as the Unconditional Cash Transfer and Pantawid Pasada programs.
“The government would not be able to quickly execute programs and projects. This means that we will miss the opportunity to create as much as 180,000 to 240,000 more jobs, and fail to lift as much as 400,000 to 550,000 more Filipinos out of poverty this year,” he said.
“Thus we call for the immediate passage of the 2019 budget. The longer we wait, the more adverse the effect will be,” he added.
An initial delay — blamed by the Senate on the House’s delayed submission and questions over alleged insertions — has already led to the shelving of mandated pay hikes for government workers. Both chambers finally ratified a bicameral conference committee report in February but the latest controversy means the proposed GAA has yet to make it to Duterte’s desk for signing.
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