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Budget delay horror gives Neda anxiety

By: - Reporter / @bendeveraINQ
/ 05:28 AM August 23, 2019

The country’s chief economist on Thursday warned Congress against delaying the passage of the proposed P4.1-trillion 2020 national budget—or else risk growing the economy by just below 5 percent next year.

Socioeconomic Planning Secretary Ernesto Pernia told the House appropriations committee that operating again on a reenacted budget next year would be a form of “regressing” and should slow gross domestic product expansion as “government spending and even private spending on fixed capital formation will be hampered.”

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“We are hoping, we are praying that it’s not going to happen again,” Pernia said, referring to the delayed approval of the P3.7-trillion 2019 budget.

President Duterte signed this year’s appropriations only in mid-April as the two houses of Congress squabbled over alleged insertions of pork funds.

As the government had operated using a reenacted 2018 budget at the start of the year, it underspent about P1 billion a day on public goods and services between January and April. In effect, public underspending pulled down first-half economic growth to an average of 5.5 percent, below the government’s 6-7 percent target range.

The economy needed to grow by an average of 6.4 percent in the second half to hit the lower end of the full-year goal.

“We look forward to timely passage of the budget to not drag growth,” said Pernia, who heads the state planning agency National Economic and Development Authority (Neda).

Pernia also urged to extend the 2019 budget’s validity—“if possible”—until the end of next year to utilize all of this year’s allocations.

Acting Budget Secretary Wendel Avisado told the committee the budget validity extension should entail approval of Congress, even as the Department of Budget and Management had proposed the issuance of an executive order (EO) by Mr. Duterte that would extend completion of construction, inspection and payment for infrastructure projects until end-2020.

Avisado said the proposed EO was already being reviewed by the Office of the President.

“On the extension of appropriation … we agree [it] requires congressional approval. Our proposed EO is only for the extension of payment,” Avisado said.

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TAGS: 2020 national budget, economy, Socioeconomic Planning Secretary Ernesto Pernia
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