Cost of delay
Published by the Visayan Daily Star
Editor-in-Chief & President
Bureau Chief, Dumaguete
MAJA P. DELY
|CARLOS ANTONIO L. LEONARDIA
The delay in the approval of the national budget remains a major risk to economic growth in the first quarter according to the March edition of The Market Call released by First Metro Investment Corp. and the University of Asia and the Pacific.
The report said that while the inflation outlook, jobs data and OFW remittances, provide bright prospects for the local economy, the failure of Congress to pass the national budget on time could dampen growth in the first three months.
“The continuing delay in the enactment of the 2019 national government budget, after all, has placed a downside risk to GDP growth in Q1,” the report noted.
Earlier, the World Bank and the Asian Development Bank trimmed their respective growth forecasts for the Philippines this year, citing the delay in the approval of the country’s national budget as among the factors for lower forecast.
Even Socioeconomic Planning Secretary Ernesto Pernia believes that operating on a reenacted budget for the entire year may slow down the economy’s growth to 4.2 percent.
FMIC and UA&P noted that national government spending may have increased, but at a slower pace in the first quarter of the year compared with previous quarters due to delayed budget. In addition, consumer spending is seen to benefit from the unabated fall in inflation and pre-election spending. They also expect consumer spending to begin recovery in the first quarter of the year, aided by more money in consumer’s hands due to election spending and the weakness in the US dollar.
After almost four months with the government operating on a reenacted budget, and despite a so-called super majority in Congress, President Duterte is finally scheduled to sign the 2019 General Appropriations Act on April 15. Hopefully, with that particular downside risk to our economic growth that could’ve and should’ve been prevented, finally resolved, our government and economy can get back on track.
And, hopefully, our government will also have learned its lesson and the legislative and executive branches can find the will and determination to work together to approve the budget on schedule, a feat that has already been proven to be doable by past administrations.*