PH GDP slows down due to budget delay – NEDA

DAVAO CITY (MindaNews / 9 May) – The country’s gross domestic product slowed down to 5.6 % in the first quarter of 2019 from 6.5% growth recorded in the same period of last year, a report released by Philippine Statistics Authority (PSA) said.

In a statement, Secretary Ernesto Pernia, director-general of the National Economic Development Authority (NEDA), blamed the slower growth of the country’s output on the delay in the passage of 2019 national budget. It was the lowest growth since the first quarter of 2015 at 5.1%.

“As we have forewarned repeatedly, the re-enacted budget would sharply slow the pace of our economic growth. We estimate that we should have grown by as much as 6.6 percent this first quarter, if we were operating under the 2019 fiscal program,” he said.

The performance of the government sector weakened in 2019 as compared with 2018’s, according to Pernia.

He said the Government Final Consumption Expenditure noted a growth of 7.4%, lower compared with 13.6% in 2018, and public construction contracted by 8.6%.

Pernia said some of the government projects – such as the construction of new police stations, purchase of new equipment by the Department of the Interior and Local Government, and repair and rehabilitation of school buildings of the Department of Education – had been hampered.

He said the Department of Budget and Management should issue a budget circular for the General Appropriations Act immediately to prevent further delays.

“While we support the implementation of the cash-based budget system, the supervening circumstances – such as the delayed budget and the election season – warrant an urgent review of the cash-based budgeting rules,” he said.

“If the payment period and budget validity are not extended, government agencies may decide to forgo implementing new programs and projects that are expected to take longer than seven months to complete, inclusive of the procurement process,” he said.

Pernia said the country could attain the full-year target growth of 6% to 7% for 2019 if it grows by an average of 6.1% over the next three quarters.

“This is still achievable given the current performance of the private sector and if the government sector is able to jumpstart and speed up the implementation of its new programs and projects,” he said.

On the slower growth of agriculture due to El Niño phenomenon, Pernia suggested that the Department of Agriculture should extend its production support programs and create a “more robust El Niño Mitigation and Adaptation Plan to address water, food, and energy security, as well as health and public safety in a more sustained manner.”

“The longer term solution is to build the resiliency of the sector, which will require changes in production and processing patterns and practices of the agriculture sector,” Pernia said.

He said the Rice Industry Roadmap must be finalized and told the different agencies that would receive funding from the Rice Competitiveness Enhancement Fund to finalize the their programs and workplans for immediate roll-out with the release of the budget. (Antonio L. Colina IV / MindaNews)