Advertisement

Malacañan says economic managers ready with contingency plan in case Duterte vetoes budget

Font Size

REUTERS

By Charmaine A. Tadalan, Reporter

MALACAÑAN PALACE on Friday assured the government’s economic managers have prepared a contingency plan to address impact of a reenacted budget after President Rodrigo R. Duterte threatened to veto the entire P3.757-trillion national budget that was submitted for his signature last March 26.

“While we are very eager and devoted to implement policies that will benefit Filipinos, this Administration is equally committed to being a stickler for the rule of law,” Presidential Spokesperson Salvador S. Panelo said in a statement on Friday.

Mr. Duterte on Thursday evening said in his speech during the Partido Demokratiko-Lakas ng Bayan campaign in Bacolod City that he will veto the entire Pnational budget if he finds irregular realignments.

“As to the possible repercussion on the economy of a re-enacted budget, our economic managers have contingency plans prepared, responsive to any conceivable event, and they will correspondingly adjust their targets, which include the execution of programs and projects relating to infrastructure as well as the delivery of basic services to the people.”

The budget, ratified on Feb. 8, is still under careful review by the Office of the President after a months-long impasse between the House of Representatives and the Senate which have each accused each other of unauthorized fund realignments.




Due to the delay, the interagency Development Budget Coordination Committee on March 13 slashed its growth forecast for 2019 gross domestic product (GDP) to 6-7% from 7-8%, while the National Economic and Development Authority projected separately that the full-year GDP growth will decline to 6.1-6.3% if the reenacted 2018 budget remains in force until April; and down to 4.2-4.9%, if reenacted for the whole year.

The delay in budget enactment — which leaves new projects unfunded and prevented the government from spending ahead of the 45-day public works ban before the May 13 mid-term elections and the rains next semester — has also prompted the Asian Development Bank, the International Monetary Fund, the World Bank, economic agencies of the United Nations and S&P Global Ratings to cut their economic growth projections for the Philippines for this year.

Senate President Vicente C. Sotto III said he was open to the possible reenactment of the budget for 2019 if that would be the only way to get rid of irregular fund realignments.

“Everything is left to the discretion of the executive dept. I will support the President’s decision. Anyway, we can pass a new one in the next Congress with new leaders,” the Senate President told reporters over phone message, Friday.

“Do remember that that was my original suggestion when it came to my attention that the House leaders were being difficult. Those whose terms end and were involved in the illegal realignments will lose all their pork. Actually, if there is indeed pork barrel in the budget, a reenacted budget erases all that.”

House Majority Leader Fredenil H. Castro of the 2nd district of Capiz, meanwhile, said the House, under the leadership of Speaker Gloria M. Arroyo, ensured the national budget is consistent with the President’s legislative agenda.

“Amid downright intrigues and bizarre accusations, the HoR worked hard to enhance transparency and accountability in the 2019 GAB (General Appropriations Bill). This move is in sync with President Duterte’s strong and unflinching stance against corruption and wastage of public funds,” Mr. Castro said in a statement, Friday. “The HoR firmly supports President Digong’s action on the GAB.”

House Appropriations Committee Chairman Rolando G. Andaya, Jr. of the 1st district of Camarines Sur, for his part, deemed the possible budget veto as an “opportunity” for the President to restore budget cuts made by the Senate.

“In making his final decision, I firmly believe that the President will take into consideration the drastic budget cuts imposed by the Senate,” Mr. Andaya said in a statement, Friday.

Mr. Andaya had accused the Senate of putting the administration’s “Build, Build, Build” infrastructure program at risk after slashing allocations for the Department of Public Works and Highways (DPWH) and the Department of Transportation (DoTr), among other agencies.

Sought for comment, ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said in an e-mail on Friday: “The ongoing budget delay will undoubtedly crimp overall GDP growth for as long as we run on a re-enacted budget.”

“Over the past few years, we’ve seen government spending, both in terms of public construction (lodged under fixed capital formation) as well as government expenditures (salaries of government officials, operating expenditures etc) complement overall government growth,” Mr. Mapa explained.

“For 2019, government expenditure as well as public construction will likely be challenged and may not be able to deliver the same amount of support to overall growth momentum. And although we are expecting household consumption to come back online this year owing to falling inflation, the loss of one support for growth will mean that we will not be growing as fast as we could have for as long as lawmakers remain at an impasse on the 2019 budget.”

Advertisement