Economy likely grew ‘above 6%’ in Q1

Published April 30, 2019, 12:00 AM

by manilabulletin_admin

By Chino S. Leyco

The Philippine economy likely grew slightly above the lower end of the administration’s target in the first three-months of the year after the national government operated under a re-enacted budget, the National Economic and Development Authority (NEDA) said yesterday.

Ernesto M. Pernia
Ernesto M. Pernia

Socioeconomic Planning Secretary Ernesto M. Pernia said the country’s Gross Domestic Product (GDP) may have grown by above 6.0 percent in January to March this year, within President Duterte’s downward adjusted target of 6.0 percent to 7.0 percent for this year.

“More on the lower end,” Pernia told reporters when asked about his assessment of the economy in the first three-months of the year and if the country met its economic growth target.

Pernia said the government was prevented from further accelerating public spending during the quarter owing to Congress’ failure to pass the 2019 General Appropriations Act (GAA) before the end of last year.

“Because of the reenacted budget, [which lasted for] four months, or one third of the year,” the NEDA chief said when he explained why the economy may have only expanded by 6.0 percent in the first three months.

However, Pernia saw some positive factors that somehow compensated for the delayed national budget. “Lower inflation motivated more spending of people, households and election related spending,” Pernia said.

The 6.0 percent to 7.0 percent GDP goal is already an adjusted range, which came from 7.0 percent to 8.0 percent.

The Duterte administration’s economic team slashed its economic growth target after the budget delay.

Earlier, Finance Secretary Carlos G. Dominguez III said that Congress’ reenacted budget had limited the national government’s spending by at least P1 billion each day in the first three-months of the year.

Asked about the impact on the first-quarter GDP of the government’s underspending, Dominguez said it “will definitely be a drag on growth.”

As early as January, Dominguez along with Pernia and former Budget Secretary now Bangko Sentral ng Pilipinas Governor Benjmin E. Diokno already warned the delayed passage of the 2019 general appropriations act may result in lower than expected economic growth this year.

The House of Representatives and Senate failed to adopt a unified version of the 2019 GAA before the end of last year, which forced the Duterte administration to operate under a re-enacted budget beginning January.

The two chambers of Congress only managed to transmit an appropriations bill to President Duterte late March.

The Office of the President received a copy of the 2019 budget bill on March 26 after months-long impasse between the Senate and the House.

President Duterte then needed almost three weeks reviewing the budget.

President Duterte signed the P3.7-trillion national budget for 2019 last month and vetoed P95.3 billion worth of appropriations for public works outside the programmed priorities of his administration.