World Bank: Re-enacted budget to ‘temper’ investment growth
MANILA, Philippines — Investment is expected to post a sluggish growth next year as the Philippine government is forced to operate on a re-enacted budget in early 2019 after lawmakers failed to pass a new outlay on time, the World Bank said Friday.
“Investment growth, however, maybe be tempered in the first half of 2019 due to the possible re-enactment of the first-quarter 2019 budget following a delay in the budget approval process,” the Washington-based lender said in a statement.
Lawmakers adjourned their session for their month-long Christmas vacation without approving the proposed P3.757-trillion national budget for next year. This means the national government will have to run using a re-enacted budget beginning next month.
Under a re-enacted budget, new programs and projects proposed for 2019 will be unfunded since the previous outlay will be reused next year.
Budget Secretary Benjamin Diokno earlier said the delayed approval of the 2019 national budget will likely result in a five-month “implementation gap” for new projects—worsened by the 45-day ban on state spending ahead of the May 2019 mid-term elections.
The National Economic and Development Authority expects the economy to shrink by 1.1-2.3 percentage points should the government operate on old appropriations. The Duterte government has a public investment program that aims to increase public capex to 7.0 percent of gross domestic product by 2022.
Also on Friday, the World Bank slashed its growth projections on the Philippine economy to “reflect recent economic trends.”
READ: World Bank downgrades Philippine growth forecasts
— Ian Nicolas Cigaral
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