Who would have thought that the delayed approval of the P3.7-trillion 2019 national budget—which economic managers had blamed for last year’s eight-year low economic growth—will become another financial lifeline during the COVID-19 pandemic?
Budget Secretary Wendel E. Avisado told the Inquirer on Tuesday (April 7) that there were still unobligated appropriations in the 2019 budget, whose validity was extended by President Rodrigo Duterte until 2020.
Avisado said that the Department of Budget and Management (DBM) was still determining how much from 2019 funds can be realigned for COVID-19 response.
The Bayanihan to Heal as One Act allowed the executive to realign P275-billion worth of items in the P4.1-trillion 2020 national budget as well as cash, funds and investments of GOCCs for social amelioration programs for vulnerable households, displaced workers and medical front liners amid the fight against the COVID-19 disease.
In the case of the 2019 continuing appropriations, Avisado said realignment can be done through issuance of DBM guidelines and would no longer require a law or an executive order (EO) from the President.
The extended validity of the 2019 budget was implemented under Republic Act (RA) No. 11464 signed by Duterte last December.
Congress had bickered over alleged “pork” funds in the 2019 budget proposal, which led to the delay in budget approval that year.
The government operated using reenacted 2018 appropriations at the start of 2019, resulting in underspending on public goods and services made worse by the election ban on projects ahead of the midterm elections in May.
Finance Secretary Carlos G. Dominguez III said also on Tuesday that while more government revenues were generated under Duterte’s watch, it could come to a point when funds may not be enough, as the President himself lamented last Monday night.
“The President’s fiscal policies since the start of his administration, of vastly improving our revenue flows as well as being very judicious with expenditures and investments, have placed us in a good position to meet the financial challenge posed by COVID-19,” Dominguez said.
Dominguez last week said that the Duterte administration’s comprehensive tax reform program raised nearly P200 billion in additional revenues in 2018 and 2019.
“We must realize, however, that we do not know how long this contagion will last and that our funds are not inexhaustible. We must, therefore, prudently marshal our resources and prepare for all eventualities,” Dominguez said.
Last month, Dominguez said that the government planned to borrow up to $2 billion (over P101 billion) from multilateral lenders like the Asian Development Bank (ADB), the Asian Infrastructure Investment Bank (AIIB), and the World Bank to finance the battle against COVID-19.
Dominguez said the middle class has not actually been forgotten in the social amelioration program of the government.
He said loan and credit card payments were on moratorium, compounded interests were prohibited.
The central bank also further lowered interest rates and provided liquidity.
“These measures favor all sectors of society, especially those some call middle class,” Dominguez said.
He reiterated that the Bayanihan law, which gave Duterte additional powers to use against COVID-19, had given priority to the most vulnerable sectors of society, the poor.
Dominguez added that the government aimed to maintain the “Build, Build, Build” initiative “which will help our economy recover quickly upon the defeat of the virus.”