Enough of the fireworks

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The year of the Earth Pig, with its tidings of good fortune, has already set in with the celebratory fireworks on Tuesday and yet our dear lawmakers in Congress still can’t seem to agree on whether to pass the 2019 budget or not, opting instead to provide their own, what else, fireworks!

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

With scant days left to tackle the spending bill, congressmen on the one hand and senators on the other marked the first few days of 2019 with irritating bickering, throwing accusations at each other like they have picked up from where they’ve left off in 2018.

While the protagonists in last year’s arguments involved mainly Rep. Rolando Andaya Jr. and Budget Secretary Benjamin Diokno, this year’s intramurals center on the dogfight between Sen. Panfilo Lacson and COOP NATCCO Partylist Rep. Anthony Bravo at the onset of the bicameral committee conference tackling the all-important General Appropriations Act for 2019.

The passage of the budget has been stalled since December, following allegations that billions of pesos had been earmarked for questionable government projects.

Lacson fired the first shot, baring that each House member has hundreds of millions in pork allocations in the proposed P3.8 trillion spending bill. Although Bravo did not categorically deny Lacson’s P160 million-per-congressman allegation, the amendments, he claimed, are not pork barrel.

Bravo lashed back at Lacson, calling him a hypocrite for allegedly throwing a monkey wrench into the bicameral discussions and suggesting that Lacson’s allegations might have been motivated by revelations that senators had inserted their own amendments amounting to billions of pesos in the proposed budget.

Lacson, in turn, branded Bravo’s assertions as pathetic. He said his latest disclosure was meant to warn lawmakers from making budget insertions, “that if they cross the red line and no matter how subtly they did it, they can still be found.”

Discussions in the bicam have been so stymied by disagreements over amendments introduced by each chamber that an exhausted Senate President Vicente Sotto III has threatened to just reenact the budget, saying it is the best option in the wake of the standoff.

“Right now, the best thing to do (if they really want to pass the budget) is to just adopt the NEP (National Expenditure Program). That will also dispel any allegations from both houses,” the Senate leader said.

Just what are the implications of a reenacted budget? Will it be good for the country? Or will it only benefit a few?

For the first time in nine years, the prospect of operating on a reenacted budget looms large, seriously threatening the implementation of the Duterte administration’s infrastructure plan that aims to spur economic growth.

As you read this, decision on whether we will have a brand new 2019 budget or a reenacted one will have been known. If Congress fails to pass a new national budget, the 2018 budget will be automatically reenacted. This means new programs and projects proposed for this year will be unfunded since the previous outlay will be used.

Operating under a previous year’s budget has always been seen as prone to corruption. It is not a rational move since the same budget would be allocated for projects that are already completed.

A reenacted budget means that there would be no expenditure plan to support new programs, including the delivery of public goods, services and infrastructures to foster inclusive growth, an analyst said.

Diokno has warned the delayed approval of the 2019 national budget will likely dampen the economy which needs state spending to fuel growth as household consumption remains in retreat due to inflation and high interest rates.

He explained that a rollover 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 midterm elections.

Salary adjustments for civilian and military personnel programmed for 2019 will also have to wait until the new budget is greenlighted, Diokno added.

According to DBM estimates, a reenacted budget would reduce disbursements by around P220 billion. While “the sky will not fall down,” as Andaya claimed, the growth impact of such a reduction would be “detrimental,” according to the Budget chief.

“Our growth targets are anchored on a carefully-crafted expansionary fiscal policy,” he said. “If you reduce the budget, you interrupt our growth momentum.”

Latest NEDA estimates show that a reenacted budget could have a GDP growth impact of -1.1 to -2.3 percent this year.

Employment will also be reduced 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.

The President, through his centerpiece infrastructure program, “Build, Build, Build,” has done his job. He has also submitted the budget on the day he delivered his State of the Nation Address last year to give our lawmakers enough time.

The ball, as we see it, is now in Congress’ court. We believe it is the collective responsibility of legislators to approve the general appropriations bill before they go on a holiday break.
As the saying goes, duty first before leisure. Enough of the fireworks.

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