GDP projections down with budget impasse
Credit to Author: Tempo Desk| Date: Sat, 16 Mar 2019 16:10:12 +0000
THE national government hopes to achieve a full-year Gross Domestic Product (GDP) growth this 2019 of 6.1 to 6.3 percent, Socioeconomic Planning Secretary Ernesto Pernia, chief of the National Economic and Development Authority (NEDA), said last Wednesday.
The government had earlier set a growth target of 7 to 8 percent GDP for 2019, with substantial increases in government spending under the P3.7-trillion National Budget for 2019, he said, but delay in Congress’ approval of the 2019 budget bill has meant that so many planned government projects cannot begin.
Infrastructure projects under “Build, Build, Build” have now been delayed, along with disbursements for the government social services program. The government was hoping to create as many as 180,000 to 240,000 jobs. Newly hired teachers cannot be paid. Since government spending makes up a substantial part of the GDP, all these projects now on hold means the GDP will not be able to reach the projected levels this year
If the national government continues to operate with the reenacted 2018 budget until next month, April, Secretary Pernia said, the annual GDP growth is expected to be 6.1 to 6.3 percent.
If the 2019 budget is still not available by August, the GDP growth is expected to be 4.9 to 5 percent.
And if the government is compelled to operate for the entire year on the reenacted 2018 budget, the GDP may go down to 4.2 to 4.9 percent.
This, in terms of the GDP, is the effect of the continued impasse in Congress between the Senate and the House of Representatives over the 2019 national budget. President Duterte met with the leaders of the two chambers Tuesday night in Malacañang, hoping to get them to agree on the final form of the 2019 National Budget, so he could immediately sign it into law.
But the meeting ended with no agreement, with each side continuing to accuse the other of realigning funds for public works projects to benefit certain districts and projects of the contending senators and congressmen. It is not only between the two chambers; within the House, there is reported strong disagreement between the current House leadership and the former one ousted on the day of the President’s State of the Nation Address in June last year.
March is fast nearing its end and that means the year’s first quarter will soon be over. Secretary Pernia has spelled out the ill effects of the budget delay month by month and quarter by quarter. With the entire nation’s attention now focused on them, the members of Congress should be able to make the needed compromises to settle their differences.