NEDA warns reenacted budget to really hurt economy

MANILA, Philippines – The war in Congress over the 2019 budget has not yet come to an end, and it might have already claimed a casualty: the economy.

The National Economic and Development Authority (NEDA) estimated that should the country run under a reenacted budget up to April, the gross domestic product (GDP) growth for 2019 would only be at around 6.1% to 6.3%, below the target range of 7% to 8%. (READ: What to expect as gov't operates on a reenacted budget)

Socioeconomic Planning Secretary Ernesto Pernia warned of a more grim scenario should the reenacted budget run until the 3rd quarter and also for an entire year.

"If the budget is passed in August, expect growth to be around only 4.9% to 5.1%. Worse, with a full-year reenacted budget, growth can go as low as 4.2% to 4.9%," he said. 

Pernia also emphasized that a reenacted budget will delay both new and ongoing infrastructure projects, as well as the unconditional cash transfer and Pantawid Pasada programs.

"The government would not be able to quickly execute programs and projects. This means that we will miss the opportunity to create as much as 180,000 to 240,000 more jobs, and fail to lift as much as 400,000 to 550,000 more Filipinos out of poverty this year," Pernia said.

The GDP growth in 2018 was 6.2%, lower than the 6.7% and 6.9% recorded in 2017 and 2016, respectively, largely due to the spikes in inflation rates.

Pernia appealed to lawmakers to quickly pass the 2019 budget to sustain the country's consistent economic growth.

"We call for the immediate passage of the 2019 budget. The longer we wait, the more adverse the effect will be," he said.

Despite having a meeting with President Rodrigo Duterte, the Senate and the House of Representatives still failed to reach a consensus on the P3.757-trillion budget for 2019– Rappler.com

Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.

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