THE Economic Development Cluster (EDC) of the Duterte cabinet will be meeting next week to assess the physical targets of the government in line with projects that can be sped up, as well as its borrowing projections for the rest of the year, the Department of Finance (DOF) said.
Finance Secretary Carlos G. Dominguez III told reporters the EDC will meet on May 24 with the Department of Transportation (DOTr) and Department of Public Works and Highways (DPWH), on which projects can be sped up now that the 2019 budget bill has been signed.
He said the EDC will also discuss with the Bureau of the Treasury (BTr) its borrowing projections for the rest of the year, as there was government underspending in the first four months this year on account of the protracted standoff between the two chambers of Congress over the 2019 budget.
“No, we are not conceding that [underspending for the whole year] yet; we are just saying what is needed and I have to talk to the DOTr and DPWH and see if they can do it. I mean, don’t do it foolishly just for the sake of spending, you have to do it in a rational way and that won’t cost us more or whatever. So it’s really a different problem. We had a meeting the other day, I told them this is incomplete; we have to go over it again, it’s a really serious problem. Then we are scheduling it, I think, on the 24th. We have to look at the physical targets first and then we will go with the DBCC [Development Budget Coordination Committee] to look at the deficit target,” Dominguez said.
After the EDC meeting on the initial assessment and physical targets, the finance chief said a DBCC meeting will follow, this time tackling macroeconomic assumptions.
“You know, I’m telling you that catch-up
is a myth. Okay, I’ll tell you what happens, people who have not been in
operations don’t realize that when you try to catch up it costs you more, you
will pay for overtime, so the same road you’re
going to build will cost more. I’ll tell you something else—when you are
rushing you will make more mistakes…So, you know, we are going to discuss
again next week with the EDC exactly what we have to do, what are really the
new targets,” he added.
As for the other funding exercises planned for this year like the Samurai bond and global bonds, Dominguez said he will discuss with the Treasury if more funding exercises are still needed for the rest of the year.
“I have to talk to Lea [National Treasurer Rosalia V. de Leon] because our expenditures really went down, our deficit went down to 2.1 percent…It depends on what we need. If we find out that we can cover everything from the domestic market, we’d much rather do that. And remember, the BSP [Bangko Sentral ng Pilipinas] just reduced the Reserve Requirement, so reducing the RR every 100 basis points is about P90 billion so that will be released in the market,” he said.
The government has been operating under a 2018 reenacted budget for the first four months of the year, due to the deadlock between the House of Representatives, as well as the Senate. This resulted in underspending by the government in the early part of the year for infrastructure projects, as well as its social programs.
The 2019 General Appropriations Act (GAA) was signed by President Duterte only on April 15, 2019.