President Benigno Aquino lll. INQUIRER file photo
President Benigno Aquino III plans to unveil Wednesday a P72-billion stimulus package that seeks to help Filipinos keep their jobs amid the slump in many Western economies and slowdown in the country.
“It was approved in principle (on Monday),” presidential spokesperson Edwin Lacierda on Tuesday said of the stimulus package.
A tight rein on expenditures was blamed for slower-than-expected growth in the first half of the year.
The latest poor news on the economy came on Tuesday, when August data showed exports had posted their biggest annual drop in two years.
Transportation Secretary Manuel “Mar” Roxas said the stimulus package was firmed up after the President’s consultations with foreign leaders and businessmen during his recent travels to China, the United States and Japan.
“The President had sensed what analysts are already saying about the turbulence in the international financial markets and the weakening of Western economies,” Roxas told the Philippine Daily Inquirer.
He said the President was seeking to protect the economy and jobs in the country by initiating the stimulus package. “He’s trying to insulate our economy from the turbulence being experienced in the US and Europe,” Roxas said.
Roxas said the stimulus package would see an increase in economic activities in the country whose exports and tourism would be affected by the economic downturn abroad.
P6.5-B LGU fund
At a press briefing, Lacierda said the President would announce the stimulus package in his speech Wednesday before foreign media correspondents at the Mandarin Hotel in Makati City.
Lacierda said Mr. Aquino touched on “some parts” of the government’s stimulus package at Tuesday’s celebration of the 20th anniversary of the Local Government Code at the Philippine International Convention Center (PICC) in Pasay City.
The President announced the “good news” at the PICC that the government would soon release the local government unit (LGU) support fund amounting to “not less than P6.5 billion.”
Lacierda said the P6.5-billion fund was part of the P72-billion stimulus package.
Mr. Aquino said the government could not neglect the local government units which provide frontline services, especially during calamities.
“For demonstrating your skills and integrity the past year, I am sure that you will be able to provide big help to your constituents and your cities and municipalities,” he said.
The President said the LGU support fund was being released in light of the reduction in the internal revenue allocation for LGUs since revenue collections slackened in 2009.
More changes
More measures are expected to be announced Wednesday and any changes to economic forecasts are also expected to be revealed this week.
The measures do not involve any extra budget requirements because government spending is running well behind target this year and this was cited as a factor in the economy slowing more than expected in the second quarter.
Since then, officials have said they would pump-prime the economy in the second half of the year, but repeated delays to the government’s infrastructure program meant money allocated for those projects is unlikely to be fully used this year.
Instead, the government has identified other projects it can spend on in the final months of the year to make use of the extra spending room, one official said.
P20-B interest savings
“These are mostly infrastructure projects that were not included in the plan this year,” said a senior government official who asked not to be named because the Office of the President has yet to make an official announcement.
“These projects will not require new debt,” the official said, adding the government could tap into interest savings of more than P20 billion this year.
The official said if these projects were realized, the country would have a better chance of meeting a growth target of 5 to 6 percent this year.
Expenditures for the first eight months of the year amounted to P947.244 billion, just three-quarters of planned spending of P1.275 trillion for the first nine months of the year even after the pace of spending picked up in recent months.
The underspending has led to the deficit for the first eight months of 2011 being just 11 percent of the full-year total. With a report from Reuters
Originally posted: 6:13 pm | Tuesday, October 11th, 2011