Lawmakers by now should realize the importance of approving the budget on time.
The Department of Budget this early has declared its intention to submit to Congress a record P4.1-trillion national government budget for 2020 on the same day President Rodrigo Duterte delivers his fourth State of the Nation Address in July this year.
The proposed 2020 budget is over P300 billion higher than the P3.757-trillion expenditure plan for 2019, which Congress passed and President Duterte signed into law only in April.
The budget proposal is one package of legislation that also outlines the government's economic plan or targets for a particular year. It lays down economic assumptions such as inflation rate, gross domestic product growth, exchange rate, employment rate and borrowing program.
Some of these macro-economic targets are presumed to be realized on the basis of the proposed expenditure program to be submitted to Congress. A major deviation from the proposed budget could cause the government to miss key economic targets.
Such deviation occurred early this year when Congress dilly-dallied on passing the 2019 budget. The government was forced to operate on a reenacted budget in the first quarter of the year until Duterte finally affixed his signature on the 2019 spending program after a long impasse between the two houses of Congress.
The delay in the approval of the national budget, as we all know now, weighed on economic growth in the January-to-March period. The GDP in the first quarter grew at a four-year low of 5.6 percent, slower than the 6.5-percent expansion a year ago and 6.3 percent in the fourth quarter of 2018.
The budget impasse in Congress during the first three months of 2019, according to Finance Secretary Carlos Dominguez III, had set off a spending cutback, which, in turn, stifled economic activity. Another Finance official noted that an underspending of P69.5 billion in the first quarter reduced GDP growth by 1.6 percentage points.
The slower GDP growth meant that work on some infrastructure projects did not take off or simply slowed down because of lack of funding. The reduced growth rate also translated into lost job opportunities for thousands of Filipinos.
