COVID-19 uncertainty: Gov’t in search of more funds to keep helping poor, keep economy breathing
The government is on the lookout for more funds to sustain help to vulnerable sectors and keep the economy from total collapse as uncertainty lingers over the COVID-19 pandemic.
Budget Secretary Wendel E. Avisado told the Inquirer on Thursday (April 16) that the Department of Budget and Management (DBM) was in discussion with Congress for more funding.
The proposed 2021 budget of P4.64 trillion is being deliberated in the Cabinet-level Development Budget Coordination Committee (DBCC) and Economic Development Cluster (EDC).
Avisado said allocations for capital outlay and maintenance and other operating expenses in the 2020 budget may be realigned though he did not say how much.
Capital outlay included expenditures on public infrastructure, which Finance Secretary Carlos G. Dominguez III had said should be the last to tapped for more funds against COVID-19.
The “Build, Build, Build” infrastructure program can help the country recover from the ravage of the pandemic, according to Dominguez.
In a presentation at the House last Tuesday (April 15), Presidential Adviser on Flagship Projects Vivencio B. Dizon said the stimulus packages of other countries all included infrastructure spending.
But Dizon had acknowledged that it may be more challenging to secure financing to roll out big-ticket infrastructure projects.
The Duterte administration was nonetheless sticking with the P4.4-trillion Build, Build, Build program. At least 22 of 100 flagship projects, worth P167.9 billion, will be financed through the national budget. At least P2.3 trillion in projects would get financing from foreign loans and grants while 29 of the projects worth P1.8 trillion are public-private partnerships.
Even the government stood to lose tax and non-tax revenues this year as individuals and businesses alike grappled with the pandemic.
Department of Finance (DOF) estimates had shown forgone revenues to reach P286.4 billion if gross domestic product posted zero growth this year, or a larger P318.9 billion if GDP contracted by 1 percent.
But the government also provided relief to taxpayers, pushing back filing and payment deadlines of certain taxes, including income tax returns for 2019 originally due under the Tax Code last April 15.
Dominguez had said that the tax deadline extensions would just delay collections, as the Bureau of Internal Revenue (BIR) further moved the due date for last year’s income taxes to May 30.
Dominguez said the delay in collections “means we have to finance expenditures more from borrowings than revenues.”
Last Tuesday (April 15), Dominguez told legislators that the Philippines will secure P310 billion in loans from the Manila-based Asian Development Bank (ADB), the Beijing-based Asian Infrastructure Investment Bank (AIIB), and the Washington-based World Bank, among other multilateral and bilateral sources.
These foreign borrowings in the pipeline formed part of the Duterte administration’s P1.45-trillion four-pillar socioeconomic strategy against COVID-19.
On Thursday, Dominguez said the Philippines would first evaluate a short-term liquidity line to be established by the Washington-based International Monetary Fund (IMF) for member-countries “with very strong policies and fundamentals in need of short-term moderate balance of payments support.”
As for offshore commercial borrowings, National Treasurer Rosalia V. de Leon on Thursday said they “continue to monitor developments, with the likes of Australia and Saudi Arabia recently in the market.”
“Deals are being printed, if you are willing to take the price,” De Leon said.
Before the pandemic, the Philippines was planning to issue dollar-denominated global bonds, renminbi-denominated panda bonds, as well as yen-denominated samurai bonds during the first half of 2020 after a successful return to the euro bond market at the start of the year.
The Philippines may also consider selling pound sterling bonds in the UK, “depends on pricing,” De Leon said.
On the domestic front, De Leon pointed to the P300-billion agreement with the Bangko Sentral ng Pilipinas (BSP) to repurchase government securities, while the Treasury fully awarded the T-bills and T-bonds it sold during the past two weeks.
Government-owned and/or -controlled corporations were also ordered by the Governance Commission for GOCCs (GCG) to contribute to the Bayanihan to Heal as One Act—the government’s response to the COVID-19 pandemic.
The GCG, in a memo, instructed all GOCCs to identify projects or programs that already have budgets which could be realigned to COVID-19 response and submit these to the DBM.
All GOCCs were also ordered to submit to the DOF and the GCG “an accounting of any unutilized or unreleased balance in a special purpose fund, as of the date of declaration of a state of emergency” as well as “an accounting of its cash, funds, investments, including unutilized or unreleased subsidies or transfers, as of March 31, 2020.”
GOCCs must submit all of these reports to the DBM, the DOF and the GCG within five days after receipt of the memorandum order.
Edited by TSB
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