Proponents of the P1.3 trillion Accelerate Recovery and Investments Stimulus for the Economy (ARISE) bill in the House of Representatives have come up with a compromise on how to implement the measure once it is enacted.
At a virtual meeting Thursday, House Economic Affairs Committee chair and AAMBIS-OWA Rep. Sharon Garin said proponents of the ARISE bill decided to implement it on a “staggered” basis.
Garin, one of the bill’s authors with Reps. Stella Quimbo of Marikina City and Joey Salceda of Albay, proposed to stagger in three stages the P680-billion spending plan in the stimulus package bill.
“Its going to be P140 [billion], then P280 [billion] in two months after SONA (State of the Nation Address, and then another P280 [billion] in the 2021 budget,” Garin said.
“So, this was not done in a hurry… I think it’s doable,” she added.
The proposed P1.3-trillion fund provided by ARISE Philippines bill to spur the country’s economy amid the expected economic contraction in 2020 has caused worries that the national budget deficit would outpace the median in the region, hurting the credit rating status and long-term economic growth prospects of the country.
The bill proposed that P688 billion in new spending on the first year to help the country cope with the economic impact of COVID-19 and another of P650 billion in three years for the enhanced “Build, Build, Build” program aimed at creating 1.5 million jobs.
However, the Department of Finance and other agencies involved in the economy said the government can afford not more than P300 billion for the projects meant to jump start the economy.
National Economic and Development Authority Acting Secretary Karl Kendrick Chua was concerned about the funding for the measure “due to limited funding sources.”
Finance Secretary Carlos Dominguez said the country could only afford a P140 billion stimulus package even as he warned against increasing the government’s budget gap further.
The economic stimulus package bill aims “to protect and assist up to 15.7 million workers, create 3 million short-term jobs and 1.5 million infrastructure over the period of three years, and help up to 5.57 million micro, small, and medium enterprises.”
Earlier, a study prepared by a House of Representatives think tank Congressional Policy and Budget Research Department (CPBRD) said HB 6815 was key to the country’s economic recovery and future growth.
The CPBRD study, titled “Notes on Supplemental Budget,” said the projected fiscal balances of Association of Southeast Asian Nations member-states would be negative in 2020.
It cited that Indonesia is expected to post a fiscal balance of -6.3 percent of its gross domestic product (GDP); Malaysia, -4.7 percent; Singapore, -15.4 percent; Thailand, -5.5 percent; and Vietnam, -6.4 percent. In comparison, the Philippine fiscal balance in 2020 is expected to be a mere -5.3 percent of its GDP. This translates to a budget deficit of 5.3 percent.
The CPBRD report also noted there was no country simultaneously combatting the COVID-19 pandemic and the economic recession that would not incur a higher budget deficit.
“Deficit spending could be considered sustainable if it does not result in persistently increasing and high debt-to-gross domestic product ratio.”
The report added the projected increase to 5.3 percent from the original target of 3 percent would be due to government revenue shortfall and not to higher government spending.
Meanwhile, Senate Minority Leader Franklin Drilon said the government should borrow more money to continuously fund the response to COVID-19 pandemic and shore up the economy.
Drilon said “the government has no choice but to borrow money since the tax collections are down.”
“Our present financial standing is not sufficient for us to cope with the pandemic situation. The COVID-19 pandemic is far from over,” Drilon said.
“We need to hire thousands of contact tracers, incentivize doctors and nurses so they won’t leave their posts, purchase PPE to protect our healthcare workforce, provide stimulus funds to businesses, and bring back home thousands of OFWs,” he added.
Drilon issued the statement amid serious concerns that some agencies, including the Overseas Workers Welfare Administration (OWWA), might go bankrupt if the situation worsened and continued up to next year.
The OWWA, upon questioning by Drilon during a Senate hearing on Wednesday, expressed concerns that their remaining P18.8 billion trust fund would go down to P1 billion by the end of 2021 if the situation worsened.
The OWWA said it would spend around P4.5 billion to repatriate all 150,000 displaced overseas Filipino workers.
Drilon said if the money was made available, Congress could appropriate more funds to reimburse OWWA to keep it financially viable.
The minority leader said the government should use its good credit standing to take advantage of credit financing facilities available worldwide.
Senator Francis Tolentino himself insisted the Department of Labor and Employment should have clear data for it to be implemented properly.
Tolentino stressed this point during the hearing of the Committee on Labor, Employment and Human Resources Development on Senate Bill No. 1456 submitted by committee chairman Senator Joel Villanueva.
The measure, dubbed as Tulong Panghanapbuhay sa Ating Disadvantaged/Displaced Workers (TUPAD) Act, seeks to institutionalize DOLE’s assistance program for displaced workers.
Without an accurate figure regarding the country’s workforce, he said there would be a problem in implementing the TUPAD Act if it would be enacted into law.
At the same time, Vice President Leni Robredo wants to know how did the government spend billions of pesos for the COVID-19 response.
In an interview over ANC, Robredo said she wanted to get more information about the fund allocation designed to contain COVID-19 through the government website, but lamented that there were “many blanks” and “not enough information.”
The Bayanihan to Heal as One Act or Republic Act 11469 on Thursday lapsed.
Robredo said the Duterte administration must release a detailed breakdown of how the anti-COVID-19 money was spent, and that the weekly report of President Rodrigo Duterte must be able to answer the questions of “where are we in our targets?” (and) “how did we spend the special funds that were given to the national government?”