By Bianca Cuaresma & Bernadette D. Nicolas, May 15 2019; Business Mirror
Image Credit to Philippine Star
AN administration-dominated senatorial slate may provide some relief to the local economy, some economists say, as further budget delays may be prevented and as the economic legislative agenda may easily make it through the congressional mill.
This is exactly what the Palace also hopes for, according to Presidential Spokesman and Chief Presidential Legal Counsel Salvador S. Panelo.
Security Bank chief economist Robert Dan Roces, in his views on the partial and unofficial results of the midterm elections, said future budget proposals are likely to be approved within the time frame with a Senate full of administration bets.
Partial, unoffical results from the Commission on Elections (Comelec) a day after Filipinos voted show an administration-dominated Senate with most of the 12 senatorial seats likely going to from the administrative political party, Partido Demokratiko Pilipino-Lakas ng Bayan (PDP-Laban), and to candidates personally endorsed either by President Duterte or his daughter Sara Duterte-Carpio, with her Hugpong ng Pagbabago. None of the senatorial bets from the opposition’s Otso Diretso slate was in the top 12 as of Tuesday afternoon’s canvassing.
“With a Senate likely to be composed of administration bets, future budget proposals may most likely be passed within the timeframe and the tax-reform program will likely be revived,” Roces said.
ING Bank Manila Nicholas Antonio Mapa also echoed the view, saying the results will lead to faster budget implementation in the future.
“The election returns point to what most of us had expected, a strong showing for administration candidates. This will help further Duterte’s legislative reform agenda with more bodies to drive TRAIN packages and hopefully lead to faster implementation and passage of budgets in the future to avoid the 1Q snafu,” Mapa said.
In the first quarter of the year, local economic growth was stifled by the budget delays, as the two chambers of Congress failed to agree on certain budget provisions in the 2019 appropriations act.
As such, growth for the first quarter of the year suffered, hitting 5.6 percent. This is the lowest growth for the country in four years.
“On the other hand, the Senate is just one-half of a coequal Congress, and it will be interesting to see the leanings of the incoming House of Representatives as well. Keep in mind that the recent budget delay was initiated by both chambers, and we’ve seen the effect on the recent GDP [gross domestic product] readings,” Roces said.
“The ideal is of course for Congress to be able to keep its check-and-balance function between the House of Representatives and the Senate, without being detrimental to economic growth,” he added.
The Security Bank economist also said that with the recent credit rating upgrade, new and sitting officials in both chambers of the Legislative house will consider expediting passage of those bills that will boost the country’s chance for an “A” rating upgrade.
“If deemed not political-capital-draining to the legislative sponsor, expect a revival of the tax reform program; and as long as the original spirit of the measure—that is, to generate P120 billion in additional revenues to fund key infrastructure projects – remains, we see the measure being priorizited by the incoming 18th Congress,” he added.
Now that administration-backed bets have dominated the senatorial elections, Malacañang is also hoping that the budget stalemate would not happen again this year.
Panelo made the statement on Tuesday as he was asked if the Palace expects reforms to be passed faster with more administration allies in the Senate.
“Probably, hopefully there would be no stalemate in the budget. Remember that is where they had a ruckus,” Panelo said.