By Melissa Luz T. Lopez, January 28 2019; Business World
Image Credit to Business World
THE DELAYED ENACTMENT of the 2019 national budget will surely hurt economic growth in the first quarter, the Finance chief said, noting that some P46 billion worth of projects have already been pushed back.
“The budget delay cost the government P46 billion for the first quarter. We cannot spend P46 billion of what we plan to do… That is the amount of the money that is not circulating, that is not going to serve the public,” Finance Secretary Carlos G. Dominguez III told reporters late last Friday.
The Cabinet official said this translates to roughly P500 million per day.
The P3.757-trillion national budget is currently before the bicameral conference committee, where lawmakers from the House of Representatives and Senate must reconcile their versions of the bill before it can be submitted to President Rodrigo R. Duterte for signing into law.
Congress has two weeks left to finalize the measure as it adjourns on Feb. 8, which is already way past its ideal year-end enactment.
Finance committee chairperson Senator Loren B. Legarda told reporters last week that lawmakers concerned hope to finish the discussions on Wednesday, with the body set to reconvene today.
Currently, the government is operating under a reenacted 2018 budget which leaves new programs and projects unfunded.
“This is the best time to start projects, so you missed that. So our GDP (gross domestic product) for the first quarter is certainly going to be affected,” Mr. Dominguez added.
Economic growth clocked in at a slower-than-expected 6.1% in the fourth quarter to pull down full-year growth at 6.2%, lower than 6.5-6.9% revised target set by the Duterte administration for 2018.
The government is counting on its aggressive infrastructure spending to boost growth to its 7-8% goal annually until 2022.
The fourth tranche of salary increases for government workers has also been delayed.
The Budget department has also released rules allowing agencies to operate under a reenacted spending plan, allowing them to release funding this quarter while they await approval of 2019 allocations. Still, the department said state spending could decline by as much as P220 billion if the budget bill fails to hurdle Congress.
Despite this, Mr. Dominguez told reporters last week that the government will be keeping seven percent as its “fighting target” for overall economic growth for this year, noting that the Philippines remains resilient to slowing global economic activity. — Melissa Luz T. Lopez