Reenacted budget for entire 2019? Bad news for economy
MANILA, Philippines – The Philippine economy will greatly suffer if the government runs on a reenacted budget for the entire 2019.
Senate President Vicente Sotto III is proposing a reenacted budget for the whole year, considering numerous controversies over the budget.
"I hope that will erase all doubts and allegations of pork and other so-called insertions in the budget," Sotto said on Wednesday, January 30.
But this proposal threatens the Philippines' consistent streak in economic growth.
Socioeconomic Planning Secretary Ernesto Pernia had said on Monday, January 28, that the country's economic growth would be slashed by around 1.6 to 2.3 percentage points under a reenacted budget for an entire year.
The government’s economic team missed its growth targets in 2018 and is aiming for a comeback.
They are gunning for a 7% to 8% gross domestic product (GDP) growth average for 2019 and 2020.
The country’s GDP growth in 2018 was at 6.2%, below most estimates and the government's goal.
Should the GDP growth be dragged down to around 4%, the country would go back to growth rates last seen in 2008.
The reenacted budget is already projected to hurt 1st quarter growth.
Finance Secretary Carlos Dominguez III told reporters last Friday, January 25, that the budget delay was already a missed opportunity to implement the government's ambitious infrastructure push.
In a Philippine Star report, Dominguez said that the delay was costing around P46 billion or roughly P500 million a day for the 1st quarter.
The government is currently operating under the 2018 budget worth P3.767 trillion, after Congress failed to approve this year's proposed allocation on time.
Lawmakers earlier eyed the passage of the 2019 budget by mid-February. – Rappler.com