MANILA, Philippines — Brace for weaker economic growth this year, no thanks to the delayed national government budget which just cleared a three-way impasse between the upper and lower chambers of Congress and the executive branch.
Thus warned the head of the Duterte administration’s economic team who noted that the earliest that the fiscal stimulus can resume at full blast will be in the second half of 2019, after the end of the election spending ban.
“It’s late. The election ban [comes into effect] two days from now,” Finance Secretary Carlos Dominguez III told reporters in Clark, Pampanga on Wednesday. “How can you award the contracts now?”
He pointed out that, despite the reported end of the impasse, it will take an additional two weeks before the national budget could come into force because of the law requiring a 15-day phase in period for any law after it is published for the public’s consumption.
Dominguez said that each day of delay in the passage of the national budget translates to P500 million less fiscal stimulus — money that was earmarked to be spent on the administration’s ‘Build, Build, Build’ infrastructure program.
The National Economic and Development Authority had earlier estimated that the growth in the Philippines’ gross domestic product — the total value of goods and services produced in the country’s during a given year — would rise by only 6.1-6.3 percent if the 2019 budget comes into force by April.
This is substantially lower than the 7-8 percent the Development Budget Coordination Committee had set as a annual growth target from 2019 to 2022.
“Negatively,” Dominguez replied when asked how the late budget approval will impact growth this year. “[The target] becomes less attainable. It’s like a balloon. If you put a little more weight on it, it won’t fly as high.”
The approval of the 2019 national budget was stalled as early as last year when Rep. Gloria Macapagal-Arroyo became Speaker of the House after unseating Rep. Pantaleon Alvarez, with the former wanting to redo the spending bill that the latter had supported.
The fray was joined by the Senate which had objections to the amount of discretionary spending or “pork” that the Lower House members had, while Malacañang was pushing for the immediate passage of any form of budget as long as the previous year’s version would not be reenacted.
“When time is lost, it’s lost,” Dominguez lamented. “No matter how much you want to catch up, you never really can.”
The Finance chief expressed dismay that the good weather over the last four months could not be maximized to fast track infrastructure projects because government funding was unavailable.
“You can try to catch up, but I don’t know by how much you can,” he said. “If it starts to rain heavily in June, you may have had a plan [to accelerate the construction of infrastructure projects], but what if weather doesn’t cooperate?”