Analyst: Higher 2020 budget to accelerate economic growth

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Metro Manila (CNN Philippines, August 23) — The proposed 2020 national budget is much higher than the 2019 budget, and an economist said that this is a good thing for the economy.

The proposed national budget for 2020 is ₱4.1 trillion, approximately 11 percent higher than the current budget of ₱3.7 billion.

"That's good news because the slowdown in the Philippine economy in the first half of the year has been largely attributed to the under-spending brought about by the delay in the national budget," said RCBC Chief Economist Michael Ricafort in an interview on CNN Philippines' Business Roundup.

The gross domestic product (GDP) in the second quarter was 5.6 percent, below the government target of 6 percent for the entire year.

A higher budget, passed on time, could help the economy catch up to its next year's growth target of 7 to 8 percent, Ricafort said.

"It would definitely help us catch-up. It would accelerate economic growth. There's a need to catch up," he said.

Ricafort said the economy needs to grow by 6.5 percent in the second half to achieve the 6 percent full-year GDP target. Infrastructure spending would be key to growth.

Should the 2020 budget be delayed again, Socioeconomic Planning Secretary Ernesto Pernia said the economy could further slow down.

READ: Pernia warns economy to slow further if 2020 budget is delayed too