Reenacted budget to trim growth to 4.2% this year

Growth may slow down to 4.2 percent this year if the government operates on a reenacted budget for the entire year, according to estimates of the National Economic and Development Authority (NEDA).

The socioeconomic planning agency said yesterday that implementing a reenacted budget until April would bring down the full-year gross domestic product (GDP) growth to between 6.1 percent and 6.3 percent.

This is below the government growth target of between seven and eight percent for this year.

“On the other hand, if the budget is passed in August, expect growth to be around only 4.9 to 5.1 percent. Worse, with a full-year reenacted budget, growth can go as low as 4.2 to 4.9 percent,” Socioeconomic Planning Secretary Ernesto Pernia said yesterday.

Pernia said a reenacted budget would delay the implementation of new and ongoing infrastructure projects, as well as the implementation of public social services such as the unconditional cash transfer and Pantawid Pasada Programs.

“The government would not be able to quickly execute programs and projects. This means that we will miss the opportunity to create as much as 180,000 to 240,000 more jobs, and fail to lift as much as 400,000 to 550,000 more Filipinos out of poverty this year,” he said.

The economy recorded a full-year GDP growth rate of 6.2 percent in 2018, lower than the government’s revised target of 6.5 to 6.9 percent largely because of inflationary pressures.

This is also lower than the 6.7 percent and 6.9 percent recorded in 2017 and 2016, respectively.

“Even with this, the economy has been steadily growing by at least six percent for seven consecutive years. Also, in the first 10 quarters of the administration, the economy has been growing at an average of 6.5 percent. We need to sustain this momentum, or even accelerate it, now with inflation rate down and within our target range,” Pernia said.

“Thus we call for the immediate passage of the 2019 budget. The longer we wait, the more adverse the effect will be,” he said.