Gov’t spending must make up for lost quarter
Credit to Author: Tempo Desk| Date: Fri, 17 May 2019 16:20:29 +0000
NATIONAL economic growth in the first quarter (January-February-March) of this year was as predicted early this month by Socioeconomic Planning Secretary Ernesto Pernia.
It dropped to 5.6 percent in these first three months, the lowest in four years. It should have been 6.6 percent, if the national budget for 2019 had been approved on time, he said. But because of the delay, the old budget for 2018 had to be used for three months. During this period, the funds provided in the 2019 budget could not be used.
Thus newly hired teachers could not be paid their salaries by the Department of Education. The Department of Interior and Local Government could not begin its construction of new police stations and purchase of new equipment. The Department of Public Works and Highways (DPWH) could not start the construction of so many projects funded under the 2019 budget.
The Senate finally sent the P3.7-trillion 2019 budget to Malacañang on March 26 and President Duterte signed it into law on April 15 after vetoing some P95 billion in projects believed to be “pork barrel” included by lawmakers. But by then, the midterm election period was on, with the usual ban on public works projects.
Secretary of Finance Carlos Dominguez III said that during this entire period, the government underspent by over P1 billion daily. Total state spending fell by some P75 billion in the three-month period.
The drop in GDP to just 5.6 percent in the first quarter indicates how big a factor government spending is in determining it. Ideally, it would be best if private sector spending had a bigger role. But we are moving in that direction, as “Build, Build, Build” creates more roads and bridges, airports and seaports, and other infrastructures needed by commerce and industry to thrive and expand.
Now that the 2019 national budget is finally in force, the national government will have to double its efforts to make up for the loss of those first three months of the year. It will have to do in nine months what it had planned to do in the 12 months of 2019.
We have full confidence that the DPWH under Secretary Mark Villar will be able to carry out this heavy load. We hope the other departments and agencies of the national government will similarly be able to complete in the next seven months what would normally take 12 months to accomplish.