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Reenacted budget to stunt economic growth

December 14, 2018 - Friday 1:12 PM by Lovely Carillo

Department of Budget and Management (DBM) Secretary Benjamin Diokno paints a not-so-good scenario for the Philippine economy’s growth prospects in case the budget is reenacted. DBM

Department of Budget and Management (DBM) Secretary Benjamin Diokno warned lawmakers about the negatives of a reenacted budget to the country’s growth momentum.

"Our growth targets are anchored on a carefully-crafted expansionary fiscal policy," Secretary Diokno said. "If you reduce the budget, you interrupt our growth momentum,” Diokno said in a statement, as a response to claims made by Congressman Rolando Andaya saying concerns over a reenacted budget are overstated.

"We have numbers,” he said. And according to DBM estimates, he said, a reenacted budget would reduce disbursements by around P220 billion by 2019.

Diokno said that while “the sky will not fall down,” as Andaya claimed, the growth impact of such a reduction would be “detrimental” to the country’s economy. 

Latest estimates from the National Economic an Development Authority (NEDA) show that a reenacted budget could have a GDP growth impact of  -1.1 to -2.3% in 2019.

This will also lead to reduction in employment by as much as 600,000 jobs in sectors such as construction, public administration and defense, wholesale and retail trade, land transport and education.

It is also estimated that 200,000 to 400,000 individuals could be pushed into poverty following the contraction of the budget.

"I have previously served two other Presidents, and I have not seen the stars align like it has for this one. With steady and relatively stable growth, we have a golden opportunity here to bring our growth even further by investing in infrastructure and human capital. We would be wasting that opportunity if we reenact the budget,” he said.