Delay in 2021 budget risks PH economy recovery

A delay in the passage of the 2021 national budget is likely to hinder the Philippine economy's recovery, as a reenacted budget would prevent the release of funds for pandemic response and infrastructure projects.

Socioeconomic Planning Secretary Karl Kendrick T. Chua stated that a reenacted budget risks the country's economic recovery next year because it forces the government to spend less.

Mr. Chua explained that a reenacted budget means using the 2020 budget, which is not COVID-responsive and is about 9 to 10% lower, thus not helpful for economic recovery.

The government has allocated P4.5 trillion for its 2021 spending plan, with approximately P1.1 trillion designated for infrastructure projects intended to fuel economic recovery.

The virus-hit Philippine economy slumped by a record 16.5% in the second quarter and is expected to contract between 4.5% to 6.6% this year.

Economic managers anticipate gross domestic product (GDP) to grow by 6.5-7.5% next year.

The House of Representatives approved the 2021 national budget on second reading but suspended sessions until Nov. 16 due to a leadership squabble, despite earlier commitments to pass the bill by mid-October.