Government justifies slow stimulus spending sans reason for delay
MANILA, Philippines — There are “no bottlenecks” in the release of much-needed stimulus, just making sure that funds requested by agencies are “really needed” to buttress the economy out of recession, officials said Thursday.
“The DBM (Department of Budget and Management) is not delaying the release of government funds,” Budget Secretary Wendel Avisado said in a virtual press conference with Malacañang reporters.
“There are no bottlenecks. We’re just following the process,” he said.
Harry Roque, presidential spokesperson, backed this up, saying that funds allocated under Republic Act 11494 or the Bayanihan to Recover As One Act “will be released as soon as possible.”
Both officials however did not give a timeframe when the bulk of P140 billion freshly made available under the law signed last month will be released. As it is, budget data showed that only 3.1% or P4.4 billion of those new allotments had been released to agencies so far.
Neither did Roque cited reasons for the delay that saw P46.2 billion worth of requests held up with President Rodrigo Duterte’s office for approval. That amount formed part of the P4.1-trillion national budget, within which the chief executive can move around money from one program to another among various agencies to ensure pandemic response is not derailed.
That power was granted under the RA 11494 or the so-called Bayanihan II law because the health crisis was not foreseen last year so programs to deal with it now were not programmed in the 2020 budget crafted and enacted last December.
The timing of fund releases would be crucial to the timely spending of the funds, which in turn would ensure that public projects go on unhampered. More broadly, economists have warned that spending delays only puts into jeopardy what appears already as a fragile economic recovery.
“The administration’s insensitivity is criminal, makes recovery even more prolonged and entrenches structural inequality. Why are the poorest families and smallest businesses being made to suffer?” Sonny Africa, executive director at IBON Foundation, a think tank, said in a text message.
Nicholas Antonio Mapa, senior economist at ING Bank in Manila, said failure of government to spend indicates no support for the shrinking economy. “With households reeling from elevated unemployment and businesses holding back on investment outlays, economic momentum will likely be slowing at a more pronounced pace should government support fade out to close the year,” he said in an e-mail.
Disbursement woes only add to concerns whether Bayanihan II will be effective as a stimulus since the P140 billion additional funding under the law, insisted by economic managers, was “so small to begin with,” Africa said. A “standby fund” worth P20.5 billion was also included, but this can only tapped if new revenue sources can be found.
Mapa agreed. “The size and scope of Bayanihan II had been a concern at the onset, but this development related to delays in disbursement and spending may not bode well for the GDP outlook in the second half,” he said.
Amid criticisms, the budget chief assured the public that government has the money for Bayanihan II. “We have the funds. The Bureau of the Treasury has certified that funds are available,” Avisado said.
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