THE Department of Budget and Management (DBM) said the government has about P130 billion on hand from savings and budget realignments with which to fund stimulus measures, much less than various proposals now being considered in Congress.
Undersecretary Laura B. Pascua told BusinessWorld that the total comes from national government savings and suspended programs, activities or projects (PAPs) from 2020 and leftover funds from 2019’s General Appropriations Act (GAA).
“We can only find funding for them from savings from discontinued PAPS from the 2019 & 2020 GAA. Hence, the economic managers have been saying to Congress that we can only afford a P130-billion fiscal stimulus for this year,” Ms. Pascua said via Viber on Wednesday.
One of the pending measures is the P1.3 trillion Philippine Economic Stimulus Act (PESA) bill recently approved by a House of Representatives committee, which includes P568 billion worth of new programs for rollout within the year.
The stimulus bills proposed by Congress are much larger than the P130-170 billion program proposed by the economic team, including a P50-billion cash infusion to state-owned banks, additional funding for loan guarantees, hiring of contact tracers and relief for large firms.
Ms. Pascua said at P130 billion in new spending and P40 billion projected as foregone revenue when the corporate income tax is reduced to 25% this year from 30% currently, “total deficit impact is P170 billion.”
Ms. Pascua said the DBM will not recommend a supplemental budget this year since according to budget rules, the government can only do so if this is “backed by a new revenue measure.”
Finance Secretary Carlos G. Dominguez III has said that the economic team will not be proposing a supplemental budget since revenue will take a hit from the weak economic outlook and there is “no supplemental revenue.”
Ms. Pascua added that another way for a supplemental budget to be rolled out is for the Bureau of the Treasury (BTr) to issue a certification that “excess funds (are available).”
“We think that the legislators might have forgotten this basic budgeting rule,” she said.
Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno, a Budget Secretary, has said the government might “need” a supplemental budget to provide stimulus, the size of which must be decided by the President along with the economic team.
The National Economic and Development Authority (NEDA) has recommended that the government prepare a supplementary budget for 2020 “to fund critical projects outside the Bayanihan to Heal as One Act.” It made the recommendation in a report issued last month and released to the media last week.
The DBM has been redirecting funds from past priorities to finance programs meant to contain the fallout from the pandemic. — Beatrice M. Laforga
