FACING FOREIGN MEDIA President Aquino answers questions from the Foreign Correspondents Association of the Philippines during Wednesday’s forum at the Mandarin Oriental Hotel in Makati City. EDWIN BACASMAS
Spending from a P72.11-billion stimulation package, known as the Disbursement Acceleration Plan, will be fast-tracked to fortify the economy and cushion the impact of the global fallout from Europe’s debt crisis, President Benigno Aquino III said Wednesday.
The President also assured the public that foreign investors were not packing their bags in the wake of the recent raid by communist rebels on three mining facilities in Claver, Surigao del Norte province.
Speaking before the Foreign Correspondents Association of the Philippines at the Mandarin Oriental Hotel in Makati City, Mr. Aquino acknowledged that government spending had been running well behind target this year, which has been blamed for the slower-than-expected growth in the first half of the year.
He said the government would “not fold under the weight of these difficulties” and “instead we will excel.”
The President said the stimulus package was meant to “make certain that we do what must be done to maintain our economy’s momentum” amid the slowdown in the global economy.
“(W)e are not sure exactly what the negative effects of the world economic turmoil will have on us since it is a developing story. But the P72.11 billion will have its own multiplier effect and this pump-primes the economy to that extent,” Mr. Aquino said in his speech.
Infra, poverty
He said the package would focus mainly on infrastructure and poverty alleviation.
The President gave a breakdown of some of the planned expenditures under the stimulus package:
- P10 billion to resettle and relocate informal settlers and families in danger zones.
- P6.5 billion as support fund for local government units.
- P5.5 billion for various infrastructure projects under the Department of Public Works and Highways.
- P4.5 billion for the improvement of the Mass Rail Transit on Edsa.
- P1.868 billion for the upgrade of the Light Rail Transit.
“The criteria we used to choose these projects were simple. The stimulus will be spent on projects that will have high macroeconomic impact and will help the poor,” he said.
Of the total amount, P37.92 billion will be released to national government agencies, P7.25 billion to local government units and P26.90 billion to government-owned or -controlled corporations (GOCCs).
Funds from pooled savings
Mr. Aquino said the funds for the stimulus package would come from “money we saved and from our existing borrowing program.”
A statement by Budget Secretary Florencio Abad said funds for the package would come from “pooled savings from unused appropriations in 2010 and 2011, windfall revenue from dividends of GOCCs, and realignments within agencies in favor of fast-disbursing projects.
The President said the effects of the stimulus package would be felt not just at the end of the year but also in the first half of next year.
“We will do what we can within the bounds of fiscal prudence to keep the economy growing and to make certain that the effects of this growth are felt more widely,” he said.
During the question-and-answer part of the forum, the President acknowledged that the stimulus package would add to the government’s effort “to reach the growth targets” which for this year was set at 5 to 6 percent or what he said was the “low end of the forecast.”
He said the growth target was lowered from the 7 to 8 percent expansion projected in January partly because of the drop in the country’s exports as a result of the earthquake, tsunami (and nuclear meltdown) in Japan and the political crisis in the Middle East.
Quick spending
Asked what steps the government was taking to ensure that the stimulus package would be spent expeditiously, the President indicated that he was taking a direct hand to ensure that the funds would be spent quickly.
“I keep talking to various Cabinet secretaries and inquiring into the status of major projects that are in their purview,” the President said.
He said he talked the other day with Education Secretary Armin Luistro on the status of the school building program target of 8,300 classrooms by the end of December.
Houses for soldiers, cops
Mr. Aquino said he also had asked the National Housing Authority (NHA) about the construction of more than 21,000 houses for the police and soldiers. He was told that there would be a one-month delay on their completion because of the La Niña phenomenon.
The NHA will complete the houses by January 12 next year, he said.
The President said he had instructed Abad to monitor the expenditures and beef up the reporting system.
He assured the public that the Public-Private Partnership (PPP) Program was moving.
‘Wrong assumptions’
Mr. Aquino said the Daang Hari-Southern Luzon Expressway (SLEx) project was expected to be awarded to the winning bidder by January.
Mr. Aquino said the Daang Hari-Southern Luzon Expressway (SLEx) project was expected to be awarded to the winning bidder by January.
This will be followed by the Northern Luzon Expressway-SLEx interconnection and the Department of Health-PPP project for vaccines, he said.
Mr. Aquino said that Malacañang was reviewing the whole PPP process and that it was “trying to compress the time element.”
“But at the same time there has been a rethinking—would it be more prudent for us to embark as originally announced with the wrong assumptions. What were the wrong assumptions?” he said.
Sumimoto
During the forum, Mr. Aquino said that he met the other day with officials of Japan’s Sumimoto Metal Mining Co., the partner of Nickel Asia Corp., which in turn owns Taganito Mining Corp. and Taganito HPAL Nickel Corp. whose facilities and equipment were burned down by communist rebels on Oct. 3.
The facilities and equipment of a third mining firm, Platinum Group Metals Corp., were also burned by the communist New People’s Army.
“They (Sumimoto officials) assured us they have no intention of pulling out… So if the main, shall we say, victim of this whole issue has not indicated a lack of interest or lessening of interest then, perhaps I don’t foresee any other foreign investors undertaking the same,” Mr. Aquino said.
He said Sumimoto officials, who requested the government to beef up security in Claver, Surigao del Norte, were assured that corrective actions were being undertaken.
Militias
The military has asked mining companies in Mindanao to hire military-organized militias to guard their facilities.
Mr. Aquino defended the military’s plan to train militias of mining companies amid fears that the paramilitary forces could lead to the creation of another private army.
He said the special Cafgu (Citizen Armed Force Geographical Unit) would be under the supervision of the military and would not be in the control of private citizens.
“Cafgus or special Cafgus will be territorial-based, will be subject to all the rules and regulations; will be under the watchful gaze of our Commission on Human Rights (Chair) Etta Rosales. We do not foresee any abuses from them but rather they will augment the abilities of our security forces to preserve peace and order in our country,” the President said. With a report from Norman Bordadora
Originally posted at 01:01 pm | Wednesday, October 12, 2011