The Department of Budget and Management (DBM) on Friday (April 17) released P96 billion to the Department of Social Welfare and Development (DSWD) for the second month of cash aid to poor families during the enhanced community quarantine against COVID-19.
The DBM, in an April 17 notice of cash allocation (NCA), released the balance of the P200 billion set aside for dole outs to low-income households to ease hardships inflicted by the COVID-19 pandemic and the lockdown imposed to stop coronavirus transmission, Budget Secretary Wendel E. Avisado told the Inquirer.
Last April 2, the DBM released P100 billion for the dole outs for the first month of implementation of the Social Amelioration Program (SAP) mandated by the Bayanihan Heal as One Act which gave President Rodrigo Duterte additional powers to deal with the pandemic.
Avisado said the DBM already released the second tranche because the DSWD needed some time to prepare for cash distribution to beneficiaries, adding that the DBM wanted to avoid any delay.
Asked why the two cash releases totaled only P196.044 billion and not P200 billion as allocated, Avisado said the remaining balance was for the SAP’s administrative costs which the DBM was still breaking down and recording in detail.
Avisado said if funds released so far would still be not enough, the DBM could request for more money.
Also on Friday, Finance Secretary Carlos G. Dominguez III said the Philippine government was “doing well with fundraising” to fill its war chest for the fight against COVID-19.
Sought to comment on 1-PACMAN Rep. Michael L. Romero’s proposal on Friday to issue $10 billion in so-called “COVID-19 recovery bonds,” Dominguez replied: “Interesting. We will prioritize borrowing from the least-cost and longest-term sources without stringent conditionalities.”
On Thursday night, Dominguez, President Rodrigo Duterte’s chief economic manager, said there was no need to sell government assets to raise more money for COVID-19 response.
In an interview on government-owned PTV-4, Dominguez was asked if the government must dispose of properties like the Cultural Center of the Philippines and other prime property assets along Roxas Boulevard, which Duterte had said would be the “last resort” if sources of funds for COVID-19 response dried up.
Dominguez replied: “I don’t think so.”
“You know, when we came to this COVID-19 emergency, we were in a very good financial position exactly because of the policies of President Duterte,” Dominguez said.
“Number one, he increased our revenues. Number two, he spent money very wisely,” he said.
“And number three, because of that, our credit rating increased and our reputation as a good borrower is very, very high—it’s the highest ever achieved by the Filipino people,” said Dominguez.
“We are now ‘BBB+’ and our next step is to be A,” he said, referring to the Philippines’ credit ratings.
Credit ratings are a measure of a government’s creditworthiness. As the stability of state finances was also related to a country’s performance, credit scores serve as a proxy grade for the economy.
Improved ratings would allow the government to demand lower rates when it borrows from lenders, which could translate to lower interest rates for consumers and businesses borrowing from banks using government-issued debt paper as benchmarks for their loans.
The Philippines current enjoys investment grade credit ratings from the top three debt watchers—Fitch Ratings, Moody’s Investors Service and S&P Global Ratings.
“So the President has really done a very good job economically—we kept on growing. And we are in a good position,” Dominguez said.
“Of course, the worst possible scenario, that maybe at some point we may have to sell some assets, but at this point, that’s not yet necessary,” he said.
“And frankly, I don’t think it will be necessary that it’s like we’ll have a fire sale. I don’t believe that will every happen,” Dominguez said speaking partly in Filipino.
Investopedia defined fire sale as “selling goods or assets at heavily discounted prices.”
According to Dominguez, the government can provide financial assistance to vulnerable sectors until end-May.
Dominguez said that in case the government would decide to even further extend the enhanced community quarantine beyond April 30, “we will recommend to the President to provide additional funding for any extension that might be necessary.”
The finance chief said that based on preliminary assessments, “by end of May we should be almost back to normal” as infections were projected to decline “because the President took very good action in the beginning” of the outbreak.
Separately, the Beijing-based Asian Infrastructure Investment Bank (AIIB) on Friday said that it doubled its COVID-19 crisis recovery facility to S10 billion “due to high client demand.”
Dominguez had said the Philippines was looking into tapping the new AIIB facility as part of the P310 billion in loans being eyed from multilateral and bilateral sources.
“Requests for funding have substantially exceeded the $5 billion originally allocated for emergency relief,” AIIB said in a statement.
The China-led lender said three key areas needed funding based on “client feedback.”
These are health infrastructure and pandemic preparedness, liquidity support and immediate fiscal and budgetary support, said AIIB.
“The AIIB is working closely with other international financial institutions to create a network of support options, especially for the most vulnerable economies,” it said.
“We are facing a formidable challenge, with the depth and severity of the crisis growing with each passing day,” AIIB said, through its chair and president, Jin Liqun.