Budget delay derails gov’t poverty reduction efforts

MANILA, Philippines — The government could have helped lift 420,000 Filipinos out of poverty in the first quarter if not for the delay in the passage of the 2019 budget, according to government economic managers.

Delivering the economic managers’ joint statement before the Senate Finance Committee, Finance Secretary Carlos Dominguez said the late passage of the 2019 budget led to the delay in the implementation of projects, which, in turn, wasted the opportunity to create 260,000 to 320,000 more jobs in the first quarter.

This, Dominguez said, further hindered the government’s poverty reduction efforts which could have saved 420,000 Filipinos during the period.

“The reenacted budget during the first quarter led the government to miss the opportunity to create as many as 260,000 to 320,000 more jobs, affecting the construction, public administration and defense, wholesale and retail trade, land transport and education sectors,” Dominguez said, citing the DOF, Department of Budget and Management (DBM) and National Economic and Development Authority (NEDA) joint statement.

“The budget reenactment also derailed poverty reduction efforts, where as many as 420,000 more Filipinos could have been taken out of poverty,” he said.

The Duterte administration is targeting to reduce poverty incidence in the country to 14 percent by 2022.

To catch up with the government’s poverty reduction targets, Socioeconomic Planning Undersecretary Rosemarie Edillon said the government needs to accelerate its infrastructure projects and ease processes to enable the private sector to go ahead with their construction projects.

“A lot of these is really because of the jobs that were not generated because of the budget impasse and therefore, the government really needs to speed up its Build Build Build program. And also for private construction, we’re hoping that administrative measures, with respect to approvals, issuance of permits, (will not be delayed),” she said.

During the Senate hearing, the DOF, DBM and NEDA informed lawmakers of the catch-up plan formulated by the Economic Development Cluster (EDC) to offset the lower spending seen in the first quarter.

Dominguez expressed confidence that key agencies, particularly the Department of Public Works and Highways (DPWH) and the Department of Transportation (DOTr), would be able to hit their spending targets barring weather disturbances.

“The only difficulty is the weather, that one we cannot totally predict. As for capability, they have the funds, they have the management system, and the push to do it. We are also looking at other agencies to speed up,” he said.

The delay in the passage of the 2019 General Appropriations Act (GAA) forced the government to operate under a reenacted budget in the early months of 2019.

As a result, actual government disbursements in the first quarter reached P778 billion, 0.8 percent higher than the P772 billion recorded in the same period last year.

Economic managers estimate that underspending amounted to P1 billion a day, or as much as P90 billion during the period.

The budget delay and the subsequent reduction in spending was also blamed for the slow economic expansion in the first quarter, which settled at a four-year low of 5.6 percent.