Election spending ban poses fiscal risk
A state spending ban before the 2022 Philippine elections is expected to disrupt government infrastructure projects and delay reforms, according to an inter-agency body that sets macroeconomic goals.
A new government next year could also affect development priorities, which could affect reforms in the budgeting system, the Development Budget Coordination Committee (DBCC) said in a report on Friday.
“The implementation of the government’s infrastructure projects may be disrupted, as public works and the release of public funds during the election period are prohibited under the Omnibus Election Code of the Philippines,” it said.
The ban on public works starts 45 days before general elections, or from March 25 to May 8, 2022. The law also prohibits social welfare dole-outs during the period.
“Risks may be mitigated by the proper and timely conduct of early procurement activities, which in turn entails the approval and effectivity of the pertinent funding sources,” the committee said.
The DBCC said it supports a measure that will reform the budgeting system because it will limit appropriations to a timeline of one year while boosting public participation in the budget process. House Bill 9214 is pending at the committee on appropriations.
The body also cited fiscal risk from the enforcement of a law that increases the share of local governments in national taxes.
Finance Secretary Carlos G. Dominguez III earlier said this could cause lower economic growth because local governments were likely to spend the funds less efficiently.
Under Executive Order 138, some basic services will be transferred to local governments by 2024. These involve P234.4 billion worth of projects, according to government estimates.
The DBCC said it remains to be seen whether local governments can sustain the level of service before the devolution.
The Senate on Wednesday approved on final reading the P5.024-trillion national budget for 2022. — Luz Wendy T. Noble