Government may allot another P200 billion to pump-prime economy in 2010

MANILA, Philippines - The Arroyo administration may allot another P200 billion next year to pump-prime the economy, according to Economic Planning Secretary Ralph Recto said yesterday.

Recto, who addressed the Food Industry Summit at the Dusit Thani Hotel yesterday, said the country’s economic managers are set to discuss the possible allocation of another P200 billion for a second Economic Resiliency Plan (ERP) next year.

Recto told reporters that a second ERP is necessary to prepare the Philippine economy for the expected global economic rebound in 2010.

An initial P330 billion was allotted this year for the ERP which is the government’s response to the global financial crisis.

The ERP seeks to ensure sustainable growth and help achieve the government’s high growth targets.

It is also intended to save and create as many jobs as possible.

The ERP likewise is envisioned to ensure low and stable prices and improve the competitiveness of the Philippines.

This year’s allotment includes P160 billion for small, community-level infrastructure projects and social protection measures, while P100 billion will be given to government financial institutions (GFIs) and social security institutions to finance large infrastructure projects.

The amount of P40 billion would cover tax cuts for low and middle income earners (P20 billion) and the scheduled  cut in corporate income taxes (P20 billion) as provided in the expanded value added tax.

The remaining P30 billion will be for additional benefits to members of social security institutions.

The ERP involve budget interventions to fast-track quick-disbursing high impact projects and spending at least 60 percent of the productive portion of the implementing agencies’ budget in the first semester.