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Reenacting the 2018 national budget for next year will not only slow down economic growth as government spending gets reduced, but also lead to job losses and push hundreds of thousands to poverty.
Department of Budget and Management (DBM) estimates showed that expenditures in 2019 will be cut by a total of P219.8 billion if a reenacted budget would be spent instead of passing the proposed P3.757-trillion cash-based appropriations.
In particular, disbursements for personnel services will be reduced by P54.4 billion; maintenance and other operating expenses (MOOE) by P14.3 billion; subsidies by P28.3 billion; and capital outlays by P122.9 billion.
Based on estimates of the state planning agency National Economic and Development Authority (Neda), this reduction in government spending would result into lower gross domestic product (GDP) growth, such that economic expansion would be 1.1-2.3 percentage points below the lower end of the 2019 target range of 7-8 percent.
According to Neda, GDP growth would only be 4.7-5.9 percent next year if the national government operates under a reenacted budget.
In turn, slower economic growth falling behind 6 percent would lead to job losses as well as many Filipinos becoming poor.
“It is estimated that employment could be reduced by as much as 600,000 if the budget is reenacted in 2019. Among the sectors to be affected are the following: construction, public administration and defense, wholesale and retail trade, land transport, and education,” a document obtained by finance beat reporters on Monday read.
As such, “it is estimated that 200,000-400,000 individuals will be pushed into poverty as a result of contraction [in budget],” it added. /kga