FINANCE Secretary Carlos G. Dominguez III said the government’s “healthy” tax collections and inflows from dividends of state-run firms are still “insufficient” to fund a deficit-neutral P175-billion Bayanihan 3 or the third stimulus package.
While they have yet to find counterpart funding for Bayanihan 3, Dominguez said having the third stimulus package is still “not out of the question.”
The finance chief said he is even willing to recommend for President Duterte’s approval of additional spending for Bayanihan 3 if they find a counterpart funding that will make the expenditure “close to fiscally neutral as possible.”
At the Development Budget Coordination Committee (DBCC) briefing with the Senate Committee on Finance on the proposed P5.024-trillion national budget for 2022, Dominguez said, “The problem that we have with additional expenditure at this time is that our expected fiscal deficit is already at 9.3 percent of GDP. That is extremely high.”
He added: “And at this point in time, although our tax collections are healthy, although our inflows from the dividends of our GOCCs are healthy, they are still insufficient to fund even the amount of P175 billion, which we have determined would be appropriate for funding the mitigation of hunger among our citizens. So we’ve been working at this for the last six or seven months, but the revenues to make it fiscally neutral are just not there at the moment.”
As of end-July this year, government’s revenue collections reached P1.75 trillion, or 4 percent higher than the P1.69 trillion in the same period in 2020. Meanwhile, government-owned and -controlled corporations have so far remitted P51.7 billion in dividends to the Bureau of the Treasury.
While revenue collection is projected to hit P2.88 trillion this year, expenditures are also seen to rise to P4.74 trillion. This is expected to result in a budget deficit of P1.86 trillion this year, prompting the government to borrow more from both domestic and foreign sources.
Pogo proceeds
WHEN asked by Senate Committee on Finance Chairman Sonny Angara whether the Department of Finance would be willing to earmark the proceeds from taxes from Philippine Offshore Gaming Operations (Pogos), Dominguez said the Pogo taxes have not been collected yet. But should the Pogo tax bill be passed, Dominguez said they are willing to have the proceeds from Pogo taxes earmarked for Bayanihan 3.
In the same briefing, Dominguez also revealed that they will suggest to the Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF) at the next meeting a further reopening of the economy. However, large businesses would be required to provide weekly testing and tracing.
He made the remark after Senator Cynthia Villar urged Dominguez to push for greater mobility for vaccinated people to help businesses, especially the micro, small and medium enterprises (MSMEs) amid the pandemic.
Dominguez said he got the idea of testing by the private sector from Senator Villar from their talk Tuesday night.
“I agree that, you know, vaccinated people should be provided more mobility than others. In fact, I have asked my colleagues, my like-minded colleagues in the IATF in the next meeting to suggest that we open more the economy, but require the businesses, particularly the larger businesses, to provide weekly testing and tracing; and move towards a rational approach to managing the containment of the virus. So I’ve asked my colleagues to please support that idea that we open but we increase testing by asking the companies to do the testing,” he said.