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Monday, April 15, 2024

Economic team to assess Bayanihan 3 fiscal impact

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THE government’s economic team will be assessing the economic and fiscal impact of the proposed P420-billion Bayanihan 3.

Budget Assistant Secretary and spokesman Rolando U. Toledo said the Development Budget Coordination Committee (DBCC) is willing to work with Congress for the “proper review of the proposed Bayanihan 3.”

In a message to BusinessMirror, Toledo said, “However, we are presently prioritizing the prudent utilization of the appropriations authorized under the FY 2021 National Budget, as well as the FY 2020 GAA and Bayanihan 2 whose periods of validity have been extended until December 31, 2021 and June 30, 2021, respectively. Rest assured that we will carefully study the proposed Bayanihan 3, specifically its intended effect on economic recovery and its impact on the country’s fiscal space.”

Budget Secretary Wendel E. Avisado refused to comment on the proposed measure “until the DBCC meets and take up this matter.”  But Toledo said there is “no schedule yet” for the DBCC meeting.

House Committee on Appropriations Chairman Eric Go Yap has said they will work closely with the Department of Budget and Management and Department of Finance to secure the funding for the proposed measure.

Marikina Rep. Stella Luz A. Quimbo also earlier said Bayanihan 3 will be a “big help to avoid stagflation,” which she defines as the combination of a stagnant economic output and rising inflation.

However, Finance Undersecretary and Chief Economist Gil Beltran told BusinessMirror “no stagflation is expected in 2021 with or without Bayanihan 3.” Beltran did not elaborate.

Local economists earlier interviewed by the BusinessMirror also said there could be no stagflation without runaway inflation, or inflation rates of above 50 percent.

No funding issue

On Wednesday, Quimbo said in a forum that finding P420 billion for Bayanihan 3 is a non-issue.

Quimbo, who filed the Bayanihan 3 together with Speaker Lord Allan Velasco, claimed that, “As of end-November 2020, the estimated cash balance in our Treasury is at P1.6 trillion. Apart from this, our total net borrowing is at P2.82 trillion. We have more than enough for what we need in Bayanihan 3.”

Once enacted, House Bill (HB) 8628 or the proposed “Bayanihan to Arise As One Act” would be the third installment of the government’s response to Covid-19 and its devastating impact on the economy.
Quimbo urged President Duterte to certify as urgent Bayanihan 3 bill to boost the recovery.

“If there is one indisputable thing, that is the economy has turned out worse than what we had all expected, and even the President agrees with this,” Quimbo said.

Quimbo said the government needs to infuse a substantial amount into the economy to prevent “stagflation.”

She noted that compared to other Asian countries, the Philippines spent too little against its gross domestic product or GDP in 2020.

“One of the main drivers of the decline is the decrease of 7.9 percent in household consumption. Meanwhile, government spending only contributed 1.3 percent to GDP growth last year. At a time when the economy is prostrate and government is being looked to for pump-priming, the growth in government spending is so little,” Quimbo said, partly in Filipino.

HB 8628 seeks to allocate P420 billion for much-needed Covid-19 response as well as recovery interventions grounded on economic inclusivity and collective growth.

The bill proposes to allocate P108 billion for additional social amelioration to impacted households, P100 billion for capacity-building for impacted sectors, P52 billion for wage subsidies, P70 billion for capacity-building for agricultural producers, P30 billion for Internet allowances to students and teachers, P30 billion for assistance to displaced workers, P25 billion for Covid-19 treatment and vaccines, and P5 billion for the rehabilitation of areas impacted by recent floods and typhoons.

These funding proposals were not considered in the National Expenditure Program, which Malacañang submitted last year to assist Congress in the review, deliberation and passage of the national budget for 2021.

Quimbo urged critics to look closely at Bayanihan 3 and how it can halt the steep decline of the country’s economy brought about by economic output stagnation and increase in inflation.

“Together with the significant decline in economic output, we have seen an increasing inflation rate, recorded at 4.2 percent in January,” Quimbo said.

“So, yes our economy is sinking, the inflation rate is increasing, while economic output is decreasing. [But there is a solution —Bayanihan 3,” she added.

Bayanihan 2

Meanwhile, DBM’s Toledo said total allotment releases under Bayanihan to Recover as One Act (Bayanihan 2) have so far reached P109.16 billion as of Tuesday.

Special allotment release orders are issued by DBM to authorize agencies to incur obligations not exceeding a given amount during a specific period for the purpose indicated.

Of the P140-billion allocation for Bayanihan 2, P103.24 billion or 73.74 percent was released, latest DBM data showed.

On top of this, another P5.9 billion in Bayanihan 2 releases were sourced from regular funds under the 2020 national budget.

“We would like to note that the release of funds particularly for Bayanihan 2 will depend on the submission of the requests of the implementing agencies with complete supporting documents,” Toledo said.

“The DBM, likewise, assures that all requests will be immediately evaluated and processed within 24 hours upon receipt thereof.”

Toledo made the remark after lawmakers urged the House Committee on Public Accounts to conduct an inquiry into the unreleased and unutilized appropriations under Bayanihan 2.

Authored by 37 lawmakers, House Resolution 1558 seeks to probe the accountability, stressing that delays in releases forego the opportunity to rescue the economy and correlate with actual economic losses, according to AAMBIS-OWA Rep. Sharon Garin.

Bayanihan 2 authorized P165.5 billion in emergency relief and spending, including a P25.5-billion standby fund.

With Jovee Marie N. Dela Cruz

Image credits: Nonie Reyes
Read full article on BusinessMirror

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