The possibility of a reenacted budget is on the horizon, as the speakership squabble led to the postponement of the 2021 national budget bill passage at the House of Representatives.

The government’s economic managers warned against the negative effects of reenacting the 2020 budget, especially as the country reels from the coronavirus pandemic.

“As much as possible, we cannot afford a reenacted budget lalo na sa panahong ito (especially during this time),” Budget Secretary Wendel Avisado told TeleRadyo on Wednesday, October 7.

He added that several projects would be affected if the budget bill is not passed on time.

“That will really affect our economy. ‘Yan ang kinakatakutan namin at alam ni Secretary Sonny Dominguez ng DOF ‘yan (That’s what we’re afraid of and Secretary Sonny Dominguez of the Department of Finance knows that),” Avisado said.

In 2019, the Philippines operated under a reenacted budget for 4 harrowing months. This played a part in slowing down economic growth to 5.5% during the 2nd quarter of that year against the 6.2% in 2018.

This year, the coronavirus lockdowns pushed the Philippines into recession, with the economy shrinking by 16.5% during the 2nd quarter.

Even as the government continues to ease restrictions, the Philippine economy is seen to contract by 7.3% in 2020, according to a forecast by the Asian Development Bank. Recovery is expected to happen in 2021, assuming there is no resurgence of the coronavirus.

But with a reenacted budget now in the equation, Acting Socioeconomic Planning Secretary Karl Chua told Rappler that it “will not help” in the country’s recovery.

“A reenacted budget means using the 2020 budget, which is not COVID-responsive. It is also some 9% to 10% lower, so [it] will not help much in our recovery,” said Chua.

‘Critical’

The Management Association of the Philippines (MAP) urged lawmakers to still pass the 2021 budget on time, despite the tight timeframe due to the premature suspension of the House session.

“We hope that the suspension will not delay the passage of the 2021 budget, which is even more critical now given the need to mitigate the impact of the current crisis,” said MAP president Francis Lim.

“Let’s keep our fingers crossed that this sad situation will not repeat itself, otherwise our country’s economic recovery from the pandemic will be delayed to the further prejudice of our people,” added Lim, referring to the negative impact of a reenacted budget in 2019.

The postponement of the approval of the 2021 General Appropriations Bill (GAB) at the House means less time for the Senate to pass its counterpart measure.

Once the Senate passes its version of the GAB, lawmakers will still have to convene for a bicameral conference committee (bicam). Once differences in allocations are ironed out, both chambers will have to ratify the report, then send it to President Rodrigo Duterte for his review and signature.

When Congress adjourns on October 17, both chambers will only have November 16 to December 18 to pass the budget bill and ratify the bicam reports.

Given the timeline, senators are not optimistic that the budget bill will be passed on time. Senator Panfilo Lacson even said that the 2020 budget is “as good as reenacted” already.

Last year, both chambers of Congress ratified the bicam report on the 2020 budget bill on December 11. But the Philippine government briefly operated under a reenacted budget still, with the President signing the 2020 GAB 6 days after New Year. – Rappler.com