2019, 2020 budgets to boost’ economy
FINANCE Secretary Carlos Dominguez III said Thursday the swift approval of the 2020 General Appropriations Act (GAA) and the extended validity of certain portions of last year’s national budget law until yearend will provide the government a “doublebarreled boost” to sustain the economy’s high growth trajectory this year.
Dominguez said public optimism is high on the Philippines’ growth prospects at the start of the year, notwithstanding the fresh challenges brought about by the eruption of Taal Volcano and the global spread of the novel coronavirus (nCoV).
The government’s bold catch-up spending plan in the second half of 2019, which was designed to deliver more infrastructure projects and social services and at a faster pace, helped the economy recover from its weak performance in the
first semester, Dominguez said.
The delay in the congressional approval of the 2019 national budget and the ban on new infrastructure during the election period that year resulted in the economy’s anemic growth in the first half of 2019.
“Clearly, a budget delayed is development delayed. The challenge at hand is to maintain the momentum of rapid growth that we were able to recover,” said Dominguez before members of the Foreign Correspondents Association of the Philippines (FOCAP) during its “Prospect for the Philippines 2020” Forum held Tuesday morning at the Peninsula Manila Hotel in Makati City.
Dominguez said the significant impact made by the aggressive state spending plan can be seen from the growth numbers in the second semester of 2019, when the economy expanded by 6.0 and 6.4 percent, respectively, in the third and fourth quarters.
The country remains to be one of the growth leaders in the region with a full-year gross domestic product (GDP) growth of 5.9 percent last year, he said.
Citing estimates by the National Economic and Development Authority (NEDA), Dominguez said the 5-month delay in the enactment of last year’s national budget shaved off nearly a full percentage point from the country’s economic expansion rate.
Had the 2019 national budget been passed on schedule, thereby allowing the government to accelerate spending on infrastructure and social services in the first half of 2019, the Philippines” full-year GDP growth last year should have been around 6.8 percent, the Finance chief said.
On the economic front, Dominguez said the year began with good news owing to the timely enactment of the 2020 national budget and the Congress” approval of the validity of certain aspects of the 2019 budget until Dec. 31, 2020.
“This provides us a double-barreled boostenough to sustain our high growth trajectory,” Dominguez said.
“Surely, the public spending side of the growth equation will spur economic activity over the next few months. We see the economy firing on all cylinders this year with substantially higher government spending on infrastructure and social services, stronger domestic consumption responding to benign inflation, and a revitalized agricultural sector,” he added.