Economic team warning: COVID-19 recovery in peril if House leadership squabble delays 2021 national budget

MANILA, Philippines—Amid a struggle for the speakership between two of President Rodrigo Duterte’s allies, there will be no one else to blame but these politicians if the proposed P4.5-trillion 2021 national budget—mostly intended for COVID-19 response—failed to pass on time and delayed the release of funds needed to fight the pandemic.

“We are hopeful that despite the current situation at the House of Representatives, the proposed 2021 national budget will still be passed according to their timetable,” Budget Secretary Wendel E. Avisado told Inquirer on Friday (Oct. 2).

Avisado was referring to the ongoing fight for leadership of the House between incumbent Taguig Rep. Alan Peter Cayetano, of the Nacionalista Party, and Marinduque Rep. Lord Allan Velasco, of Duterte’s PDP-Laban. The two congressmen entered into a term-sharing agreement in front of Duterte but which is now likely to be junked as Cayetano makes a bid to keep the speakership.

Asked if he warned legislators of the potentially negative consequences of delayed budget approval, Avisado replied: “They know all that, and they are as much concerned as all of us.”

Squabbles between the House, the lower chamber of Congress, and the Senate over alleged pork in the P3.7-trillion 2019 budget delayed its approval by four-and-a-half months, slowing government spending on public goods and services which led to an eight-year low growth rate.

The economic team considered 2021’s record-high budget as part of the much-needed stimulus to revive the economy from a record recession driven by COVID-19.

Finance Secretary Carlos G. Dominguez III, the head of the economic team, said he believed that “the entire Congress is aware that the enactment of the budget in a timely manner is essential to the recovery of the economy from the ravages of the contagion.”

“We are confident that they will do their duty,” said Dominguez, Duterte’s chief economic manager.

Asked by the Inquirer if the economic team had any “Plan B” in case the power struggle at the House dragged on, Dominguez replied: “The only other option to a non-passage of the budget is a reenacted budget,” which was similar to what happened in 2019 when the squabble over corruption-laden pork funds delayed the budget passage.

But Dominguez warned that a reenacted budget in 2021 “will mean the bounce back of the Philippines’ economy and the return to normal of Filipinos’ income levels will be delayed.”

“I am sure that the legislature will work hard to avoid that situation. To paraphrase Vice Admiral Horacio Nelson before the Battle of Trafalgar, ‘the country expects that everyone will do their duty,'” Dominguez said.

TSB