The Philippine economy may have only grown slightly during the first quarter of 2019 since government spending was stunted when Congress failed to pass the 2019 General Appropriations Act (GAA) or national budget in December.
According to the Manila Bulletin, Socioeconomic Planning Secretary Ernesto M. Pernia revealed that the Philippine economy may have expanded "more on the lower end" of President Rodrigo Duterte's target growth of six to seven percent for 2019.
Pernia was asked if he thought the Philippines reached its growth target, to which Pernia explained that the first three months of this year encountered some internal headwinds. "Because of the reenacted budget [which lasted for] four months, or one-third of the year," he noted.
After the 2019 national budget experienced delays, Duterte slashed the original the country's original economic growth target of seven to eight percent to six to seven percent.
Before Pernia was asked about his thoughts on the Philippine economy, Finance Secretary Carlos G. Dominguez III already pointed out that the reenacted budget slashed government spending by around PHP1 billion per in the first quarter.
Other analysts from the Bangko Sentral ng Pilipinas already warned earlier this year that the national budget's delay in passing will most likely result to shadier economic growth this year.
Duterte only received the GAA late March and signed it on the 26th. Multiple local outlets revealed that a row between Congress and Senate caused the three-month delay.
Despite doubts about the Philippine economy's growth for the first three months of 2019, S&P Global upgraded its debt rating on the country from BBB to BBB+. According to Business World, the credit agency also assigned a "stable" forecast on the said rating.
S&P attributed its higher credit rating on the Philippines to an economy that's expected to remain strong in the coming months. The agency added that the country's governmental fiscal accounts remain solid and public indebtedness is low.
Aside from a strong economy, S&P Global said the Philippines' is being supported by relevant policy reforms and improving investments in the market. The agency said economic growth may stay above-average if the country stays on the right track.
The news came after Duterte wrapped up his China visit for the second Belt and Road Forum wherein he secured grants, business deals, and an enhanced bilateral relationship with the Chinese government last week.
CNN Philippines reported that Duterte signed 19 business deals with Beijing. The Department of Trade and Industry (DTI) confirmed that the Philippine delegation signed 13 Memoranda of Agreement (MoA), two purchase framework agreements, three cooperation deals, and one contract agreement.
