Business group warns delay in 2021 budget will weigh down economy

ABS-CBN News

Posted at Oct 07 2020 10:29 PM | Updated as of Oct 08 2020 01:22 AM

Workers weld iron rods at the construction site of the Unified Grand Central Station (UGCS), also known as the Common Station, along north EDSA on July 21, 2020. ABS-CBN news/file photo

MANILA - One of the country's most influential business groups on Wednesday warned that a delay in the passage of the 2021 national budget will have dire consequences for the economy.

As rival factions in the lower House wrangled over the leadership of the chamber, the Management Association of the Philippines said the situation was similar to what transpired 2 years ago when the impasse between the House and the Senate delayed the 2019 budget's passage.

The delay led to reduced government spending, which in turn slowed down economic growth.

House Speaker Alan Peter Cayetano and his allies hurriedly passed the 2021 budget on second reading and suspended the chamber’s session until Nov. 16 following allegations from Marinduque Rep. Lord Allan Velasco that he was holding the spending plan hostage to stay at the chamber's helm.

MAP said it hopes Congress' suspension of its session will not impact deliberations on the budget bill.

“We hope that the suspension will not delay the passage of the 2021 budget, which is even more critical now given the need to mitigate the impact of the current crisis," MAP president Francis Lim said in a statement.

MAP noted that in 2019 the country's GDP grew only 5.6 percent in the first quarter of 2019, much lower than the 6.5 percent growth recorded during the same period of 2018.

"Let’s keep our fingers crossed that this sad situation will not repeat itself, otherwise our country’s economic recovery from the pandemic will be delayed to the further prejudice of our people,” Lim said.

Malacañang on Wednesday said it was "confident" that Congress can pass the 2021 national budget, which included funds for the country's response to the coronavirus pandemic.

Senate President Vicente Sotto III however said there was no way that they could finish the Budget in time if it was not submitted before the mandated break on Oct. 14.