Dominguez: Proposed stimulus package ‘PH-Progreso’ is sufficient

The proposed amounts reaching a maximum of P160 billion being pitched by the Duterte administration’s economic team as stimulus fund for COVID-19 response are sufficient even for those in rural areas, according to Finance Secretary Carlos G. Dominguez.

The cost of the stimulus package, called Philippine Program for Recovery with Equity and Solidarity or PH-Progreso, was estimated to range from P130 billion to P160 billion.

“The stimulus program will be appropriate for the rest of the year,” Dominguez told a hearing of the Senate committee of the whole, in response to Sen. Imee Marcos’ comment that the proposed package may not be enough.

For one, “we still have the rest of our budget we will spend for the rest of the year,” Dominguez said, noting that only about 25-30 percent of the P4.1-trillion 2020 national budget was spent during the first four months of 2020.

On PH-Progreso, Dominguez pointed out that the package will add an additional P50 billion in capital to government financial institutions like Land Bank of the Philippines (LBP) and Development Bank of the Philippines (DBP) aside from some P20 billion being infused into the unified Philippine Guarantee Corp (Philguarantee).

Dominguez said the P70 billion in additional capital will support loans estimated to reach P800 billion, adding that the multiplier effect of every P1 capital of banks was 8.5-10 times, while a bigger 12-20 times were generated by guarantees.

“The P800-billion worth of activity—that is the best use of our funds at this time,” Dominguez said.

The Department of Finance (DOF), which oversees Landbank, DBP and Philguarantee, planned to tap the two state-run lenders as wholesale banks that will serve as rediscounting agents for small- and medium-sized banks as well as microfinance institutions.

Dominguez said doing so will not only bring money to the countryside but also ultimately revive the national economy.

First-quarter gross domestic product already shrank by 0.2 percent and the prolonged COVID-19 lockdown during the second quarter of 2020 was expected to bring the Philippines into recession, with full-year GDP seen declining by 2-3.4 percent in 2020.

In response, Marcos told Dominguez that the Duterte administration’s plan was similar to the “Masagana 99” program of his father, the late dictator Ferdinand Marcos.

But Dominguez replied: “I was the secretary of agriculture that cleaned up the mess that was left by ‘Masagana 99.”

“There were about 800 rural banks that were bankrupted by that program, and we had to rescue them. So whether it is a total success or not, tends to be measured against that,” was Dominguez’s retort to Marcos’ attempt to praise her late father.

Dominguez later told reporters about the Marcos dictatorship’s rice production program: “It was a big headache—900 rural banks were bankrupted by (the time the Marcoses were ousted in) 1986.”

Dominguez had served as agriculture secretary and natural resources minister under former president Corazon Aquino, who toppled Marcos out of power through the peaceful 1986 Edsa People Power Revolution.

In turn, Marcos replied that his father’s more than 20 years of one-man rule were marked by “success” in rice exportation, to which Dominguez retorted: “We never exported rice, Ma’am.”

Edited by TSB