NEDA warns: PHL GDP to fall to 4.2% if budget reenacted for full year 2019

The Philippines will fail to meet its economic growth target in 2019 should the country continue to operate on a reenacted budget for the rest of the year, the National Economic and Development Authority (NEDA) said Wednesday.

In an emailed statement, NEDA said a reenacted budget until April 2019 would bring down the full-year gross domestic product to 6.1 to 6.3 percent, below the government target of 7 to 8 percent.

“On the other hand, if the budget is passed in August, expect growth to be around only 4.9 to 5.1 percent," Socioeconomic Planning Secretary Ernesto Pernia said.

"Worse, with a full-year reenacted budget, growth can go as low as 4.2 to 4.9 percent,” Pernia added.

Should this be realized, this would be the first time in at least seven years that economic growth would not hit 6 percent, or since the 3.7 percent recorded in 2011.

The Philippines already failed to meet its economic growth target in 2018 at 6.2 percent, which the government blamed on the weak performance of the agriculture sector.

This year, NEDA said growth could be slowed by the reenacted budget as President Rodrigo Duterte has yet to sign into law the P3.757-trillion proposed budget for the year.

"I will not sign anything that would be an illegal document," Duterte said in a speech on Monday, March 11.

Senator Panfilo Lacson earlier said Senate President Vicente Sotto III will not sign an enrolled bill on proposed appropriations, if the House of Representatives sticks to its multi-billion peso worth of amendments supposedly to favor allies of Speaker Gloria Macapagal-Arroyo.

Lacson warned the government will continue to operate on a reenacted budget until August when Arroyo, whose term as Pampanga representative ends in June, is no longer the leader of the House.

Meanwhile, House of Representatives Appropriations Committee chairman Rolando Andaya Jr. earlier claimed the House was only itemizing lump-sum appropriations "without departing from the approved specifications" of the ratified budget.

"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," said Pernia.

"Even with this, the economy has been steadily growing by at least 6.0 percent for seven consecutive years. Also, in the first ten 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," he added. — RSJ, GMA News