Two 'super' national budgets to boost 2020 economic growth — ING Bank

Two 'super' national budgets to boost 2020 economic growth — ING Bank

MANILA, Philippines — Congress’ approval of a bill extending the validity of the 2019 national budget until December next year could bode well for economic growth as the measure, if passed into law, is expected to support state spending, a global bank said Tuesday.

“What's better than a super [national] budget? Two of them,” said Nicholas Mapa, senior economist at ING Bank in Manila.

“Given cash-based budgeting, the government would not be able to carry project funds over to 2020 without this bill being passed into law, making this development worth noting,” Mapa added.

The Philippine economy expanded 5.5% in the second quarter, weaker than 5.6% recorded in the preceding three months after the delayed approval of the 2019 budget disrupted state spending.

But the economy managed to rebound in the third quarter, growing 6.2% during the period with construction, which expanded 16.3%, contributing the most to gross domestic product growth, National Statistician Dennis Mapa said.

ING Bank’s Mapa said should the 2019 budget be extended, he expects a “double dose of fiscal stimulus” as the 2019 and 2020 budgets operating in parallel — in tandem with the central bank’s current easing cycle — can charge growth next year.

“Should these factors come together, the prospect of effectively chasing the higher 2020 growth target of 6.5-7.5% will become more tenable, with or without a global slowdown,” he said.