By Bernadette D. Nicolas, March 21 2019; Business Mirror

Image Credit to Business Mirror

TWO months before elections and amid a budget impasse, President Duterte signed an executive order (EO) authorizing the grant of the fourth tranche of the increase in the salaries of government employees.

EO 76, which was signed by the President on March 15, amended EO 201, which provides that the implementation of the fourth tranche of salary adjustments this year would have its funding sourced from the full-year appropriation in the 2019 national budget.

“Whereas, due to the reenactment of the FY 2018 GAA, there is a need to identify an appropriate funding source to cover the requirements for the implementation of the fourth tranche compensation adjustment for civilian government personnel scheduled in 2019 under EO 201,” read the new EO.

“Pending the enactment of the FY [Fiscal Year] 2019 GAA [General Appropriations Act], the funding requirements for the compensation adjustment for FY 2019 shall be charged against any available appropriations under the FY 2018 GAA, as reenacted, to be determined by the DBM, subject to existing budgeting, accounting, and auditing rules and regulations.”

Given the developments constraining the passage of the budget, the Department of Budget and Management earlier recommended the amendment of EO 201 to the Office of the President.

The government has been operating under a reenacted budget as the 2019 proposed national budget has not yet been transmitted by Congress to the Palace for the President’s signature. The Senate and the House of Representatives are still arguing over last-minute changes on the budget after it was ratified. Malacañang and the government’s economic team has since urged Congress to resolve the impasse to avert further economic consequences of operating under a reenacted budget.

“We reiterate our vigorous call to the two chambers of Congress to end this impasse on the budget with dispatch that the General Appropriations Bill may finally be transmitted for the President’s review and approval,” Chief Presidential Legal Counsel and Presidential Spokesman Salvador S. Panelo said in a statement.

The National Economic and Development Authority (Neda) said GDP would grow at a slower 4.2 to 4.9 percent if the government will operate under a reenacted budget for the rest of the year.

If the budget impasse is resolved by April, full-year GDP is expected to hit 6.1 percent to 6.3 percent. A reenacted budget until August will cause the economy to expand by 4.9 to 5.1 percent this year, according to Neda.

The budget impasse, along with the ill-effects of El Niño and global headwinds such as global trade tensions, also forced the government to cut its growth targets for this year and the year 2020.

During its 175th meeting last week, the Development Budget Coordination Committee scaled down the GDP growth target for the year to 6 percent to 7 percent, from the previous 7 percent to 8 percent.