The House of Representatives’ technical working group of its Defeat COVID-19 Committee is preparing a bill that adds P370 billion to the government’s war chest to mitigate the effects of the novel coronavirus.
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The P370 billion will be allotted for the economic stimulus package to be used to revive the economy that has been at a standstill because of the Luzon-wide Enhanced Community Quarantine.
The panel’s technical working group on Tuesday night moved to consolidate several proposals that will provide the economy a kickstart following discussions on the Economic Stimulus-Response Package prepared by several legislators led by Albay Rep. Joey Salceda, chairman of the chamber’s committee on ways and means.
This developed as Finance Secretary Carlos Dominguez III said Wednesday the country has secured a $500-million loan from the World Bank to boost its anti-COVID-19 war chest. (See full story on A8–Editors)
The loan, signed April 10, is payable in 29 years inclusive of a 10.5-year grace period, he said.
“This $500-million facility, which is just one of several financial assistance programs made available to the Philippines by the World Bank during this global health crisis, bolsters the Duterte administration’s overall efforts to provide instant relief to the poor and other hardest-hit sectors, and strengthen our health care system,” Dominguez said.
Salceda said Tuesday night a 5 percent to 6 percent addition in the proposed 2021 national budget may be proposed, lower than the 10 percent to 11 percent sought by the Development Budget Coordination Committee because of an expected drop in government revenues due to the COVID-19 pandemic.
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This developed as Speaker Alan Peter Cayetano said the House will work with Malacañang in crafting the proposed 2021 national budget that would contain the government’s response to a post COVID-19 situation.
Cayetano maintained the House and the Department of Budget and Management were considering a smoother process for the preparation and approval of the annual national budget.
“That is what we want to do and that is what Budget Secretary (Wendel) Avisado wants to do—even before the President submits the budget to Congress, there is a consultation with the proper committees of both the House and the Senate, instead of them preparing it and the House revising it and the Senate doing its own revision,” Cayetano said.
Salceda said the Department of Finance has forecast lower revenue collections this year as a result of the closure of businesses in compliance with the 45-day Enhanced Community Quarantine of lockdown in Luzon.
However, Deputy Speaker for Finance Luis Raymund Villafuerte said the chamber could still go along with the DBCC proposal of a P4.6-trillion national government budget for 2021 by covering the shortfall with more borrowings.
“We are in a good fiscal position. We can borrow money. We are bankable. I think we can stick to that budget based on a reprioritization,” Villafuerte said.
He said a “reprioritization” is needed to focus spending on responses to the COVID-19 pandemic.
“For Congress, definitely the investments would continue to be on infrastructure and health. We will have to prioritize health because of the situation,” he added.
READ: Salceda proposes P53-b wage subsidy for 6m middle-income wage earners
AAMBIS-OWA Rep. Sharon Garin, chairman of the committee on economic affairs, and Marikina City Rep. Stella Quimbo collaborated on the draft document that seeks additional funding for anti-COVID-19 efforts.
The TWG will consolidate the Economy Moving Forward as One bill filed by Quimbo and the Philippine National Stimulus Strategy prepared by Salceda after hearing from several resource persons from different agencies of government, including the Department of Finance.
Garin said the economic stimulus proposals would be “light at the end of the pandemic tunnel” for some 30 million Filipino workers and 1 million business establishments who were hurt by the six-week Luzon-wide lockdown.
“Let’s save livelihoods. Let’s save jobs. Let’s save the economy. Let’s flatten the recession curve,” Garin said.
In related developments:
• The Department of Social Welfare and Development has asked local government units to fund emergency subsidies for poor families who were not included in its list. The DSWD made the appeal two days after it said that families in need who were not on the government list can appeal with local social welfare offices through their LGUs.
• More than 3 million poor households that consume less than 50 kilowatts per hour will get free electricity for March and April, Cabinet Secretary Karlo Nograles said Wednesday. Nograles, spokesman for the Inter-agency Task Force (IATF) for the Management of Emerging Infectious Diseases, said the Pantawid Liwanag program aims to help 3 million poor consumers of electricity who cannot work or have become jobless because of the Luzon-wide lockdown.
• Senator Christopher Go urged concerned national government agencies to assure the public that qualified beneficiaries, from the poor to the middle class, will receive financial and assistance through various programs. Senator Sherwin Gatchalian, meanwhile, said the government needs to come up with a solution to ease the burden of Filipino households whose electricity bills are expected to pile up after a month of reprieve especially after the ECQ was extended. He also appealed to the Manila Electric Co. to temporarily waive its convenience fee so that consumers may be able to pay their electricity bills using the company’s mobile app without extra charges. According to Meralco, consumers who pay via the app have to pay an additional P47 convenience fee.
Quimbo’s proposed P370-billion fiscal stimulus package is designed to prevent the mass layoffs of workers expected following the lockdown due to the bankruptcy of many business concerns, most of them small businesses.
Quimbo said some 29 million workers stood to lose their jobs.
She said the small and medium-sized businesses will be hardest hit by the economic standstill. These account for some 746,960 formal concerns and 4.5 million informal startups in the sectors most affected by COVID-19 crisis.
“The small businesses will greatly suffer from the new normal [after the quarantine],” she said.
Quimbo said the pandemic could potentially cost the country a total of P1.08 trillion.
She said the government has to spend P700 billion to prevent an economic collapse, with P330 billion public spending through the Bayanihan to Heal as One Act and the remaining P370 billion for fiscal stimulus.
“Government can help businesses help themselves in the post-COVID era,” she added.
Quimbo’s proposal provides that P110 billion will be allocated for wage subsidies, P140 billion for interest-free loans and loan guarantees, P119 billion for grants to support activities to improve business resilience, and P1 billion to compensate for paid sick leaves of COVID-19 patients.
Quimbo also proposed that the government come up with a long-term plan for economic resilience to improve the country’s economy, to specifically recover from pandemics, natural disasters, and financial crises.
Meanwhile, Salceda’s Philippine National Stimulus Strategy proposes structural adjustment plans “to increase the country’s economic resilience.”
Salceda’s proposal includes a Negative Interest Loans (NIL) plan, or a P350-billion loan package that will grant loans at negative interest in exchange for workers retention. The maximum loanable amount shall be 50 percent of the company’s direct labor costs and the loan shall be payable for three to five years, Salceda said.
His proposal also includes a Credit Refinancing and Mediation Service to ensure that small businesses are able to fulfill obligations under more favorable terms of credit.
Finance Assistant Secretary Antonio Lambino said the government is also looking for other sources to boost its anti-COVID-19 funds.
Also on Wednesday, Senator Imee Marcos defended her proposal to suspend debt payments, after Dominguez warned that this would put the country’s track record in peril.
“We have built a 34-year track record, beginning with the Cory Aquino administration, of honoring our country’s obligations. Honoring our word has allowed us to remain as one of the most attractive investment destinations and one of the world’s favorite bond issuers,” Dominguez said.
He said the Philippines’ regular debt payments made it trustworthy in the eyes of global banks and financial institutions.
Earlier, Marcos told the Finance chief to “have a heart,” saying that postponing debt payments would be a better option to shore up funds compared to President Rodrigo Duterte’s suggestion for the economic team to sell assets and “steal if they have to.”
She also cited a debt relief program granted by the International Monetary Fund to 25 poor nations — mostly from Africa — that will restructure their loans for the next six months.