A reenacted 2020 national budget could drag Philippine economic growth to below 5 percent next year, Socioeconomic Planning Secretary Ernesto Pernia warned on Thursday.
“We will have a regressing economic growth performance of probably below 5 percent or [somewhere near that figure],” Pernia told lawmakers during the Development Budget Coordination Committee briefing on the proposed national expenditure for 2020 at the House of Representatives in Quezon City.
He was asked for his gross domestic product (GDP) growth outlook if the proposed P4.10-trillion national budget for next year would not be approved on time, just like what happened to the 2019 appropriations.
Pernia, also the National Economic and Development Authority (NEDA) chief, said a reenacted budget “is not going to be good” amid the country’s growing population and infrastructure needs.
“[G]overnment spending and even private spending on fixed capital formation will be hampered by reenacted budget, as well,” he added.
The NEDA head pointed out that the country’s economic growth actually regressed in the first half of the year because of the delayed approval of the national budget.
“Our growth regressed. We could have achieved 6.5 percent, but we only [posted] 5.5 percent. That is a full one-percentage-point regression in economic growth,” he said.
“We’re hoping that it’s not going to happen again,” he said as an appeal to lawmakers to pass the 2020 national budget on time.
A dispute between the Senate and the House of Representatives over alleged insertions resulted in a four-and-a-half-month delay in the approval of the 2019 outlay.
Before the approval in mid-April, the government was forced to operate on last year’s budget, unable to spend on projects and programs supposed to be implemented this year.
On top of the delayed approval, government spending was also banned from March to May because of the May 13 midterm elections.
This resulted in government spending declining by 0.8 percent to P1.59 trillion in the first half of the year.
This also resulted in the country’s GDP growing by 5.6 percent in the first quarter and 5.5 percent in the second.