MANILA, Philippines (UPDATE 4:16 p.m., Feb. 9) — Lawmakers are again prodding the Duterte administration to spend more and revive the economy, a push that is still likely to fail without solid support from economic managers hesitant about ballooning the deficit.
There are two areas legislators are pursuing this: first, a new P400-billion Bayanihan to Arise as One bill filed over the weekend by legislators led by no less than Speaker Lord Allan Velasco. Second, a looming probe on spending delays from an already downscaled stimulus last year.
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At the Senate, similar moves are already underway. Sonny Angara, chair of Senate finance committee, said he had started “soliciting the opinion of economic managers” for a new Bayanihan package.
“No harm in starting to talk about it now even as Bayanihan II is still being implemented,” Angara said in an online exchange. Senate President Pro Tempore Ralph Recto already filed his own Bayanihan III bill last December.
Economic officials led by Finance Secretary Carlos Dominguez III and Acting Socioeconomic Planning chief Karl Kendrick Chua have not responded to request for comment, but both had earlier thumbed down proposals for a bigger fiscal stimulus over worries that with falling tax receipts, debt already at historic highs is only bound to get costlier.
Malacañang itself echoed these views from economic officials on Monday.
But observers are in agreement that the weakening economy, which Chua had said was off to a “slow start” following a 9.5% slump last year, is in dire need of drastic government boost. No less than Felipe Medalla, a member of the central bank’s policymaking Monetary Board, said that more state intervention is warranted to salvage the economy.
“Fiscal policy is really important and our role is to signal to the government that we are here to support you and if you have good projects, do it, no matter the deficit,” Medalla said in an online forum.
A good start would be the P400-billion Bayanihan III proposal under House Bill No. 8628, which includes funding for subsidies to struggling businesses, cash assistance to the poor and displaced workers, as well as provisions for internet-based learning.
Medalla said while he does not exactly agree with some of Bayanihan III’s components, particularly salvaging failing businesses, fiscal support to distance learning as well as direct cash handouts would be beneficial. Cielito Habito, who like Medalla is a former planning secretary, agreed.
“No. 1 is to put it into people’s pockets to ramp up demand. Clearly, we are in need of more of that ayuda (assistance),” Habito said in the same forum.
Despite bleak chances of getting Chua’s and Dominguez’ backing, Marikina Rep. Stella Luz Quimbo, who co-authored HB No. 8628, chose to be hopeful. “We hope that the economic managers have the same assessment of the current situation and the recognition that Bayanihan 2 and the 2021 budget need to be supplemented by another stimulus package…,” she said in a text message.
Bayanihan II probe eyed
Not only is Congress convincing the Executive branch to launch a compelling spending plan, they are also after disbursing funds as quickly as possible. Under House Resolution No. 1558, signed by 37 lawmakers including President Rodrigo Duterte’s allies, lawmakers are demanding an explanation for the sluggish release of already approved stimulus funds.
Under the resolution, a probe on the P165.5 billion in additional spending approved last year is being proposed. Those funds were critical components of the Bayanihan to Recover As One Act that was meant as a pandemic cushion by financing unforeseen expenses like aid to public utility vehicle drivers, teachers as well as capital to state banks for lending.
Yet as per the resolution, 26.3% of the funds remained unutilized to date. Budget data showed a bigger backlog of 37.3% as of end last year. “The economy cannot afford slow implementation of government relief programs that have already been approved and authorized,” the resolution stated.
“The delays in releases forego the opportunity to rescue the economy and correlate the actual economic losses, as evidenced by the dramatic decline in lending amid the delays in infusing capital to government financial institutions,” it added.
Sought for comment, Budget Secretary Wendel Avisado said the spending pace should pick up in the coming months. "We can expect higher spending on the part of agencies due to the combined impact of the passage of (fiscal year) 2021 GAA (General Appropriations Act) and the extension of FY 2020 GAA and Bayanihan II," he said in a text message. — with Prinz Magtulis
Editor's note: Added Wendel Avisado's comment