Enacting an anti-COVID budget

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FINEX Folio — By J. Albert Gamboa-125


Finance Secretary Carlos Dominguez III has stated time and again that the 2021 national budget is crucial to the recovery of our pandemic-ravaged economy. In media briefings, he said there is no Plan B and if the passage of the appropriations bill is delayed, the government will have to operate on a reenacted budget just like in the first quarter of 2019. In hindsight, we know about its dire repercussions on the country’s GDP growth last year.

There is reason for Mr. Dominguez to get worried about the current infighting in the House of Representatives concerning the term-sharing issue between Speaker Alan Peter Cayetano and Rep. Lord Allan Velasco. Its effect on budget deliberations will further set back the recovery of Filipino workers whose income levels have been adversely affected by the global pandemic.

The government economic team had worked hand in hand with Mr. Cayetano’s camp in the passage of the 2020 national budget at a record speed of 20 working days. They also collaborated closely in crafting the “Bayanihan I” and “Bayanihan II” laws meant to defeat the COVID-19 crisis and help stimulate the economy.

A clear majority of congressmen voted to keep Mr. Cayetano as Speaker when he offered to resign last month. On the other hand, Mr. Velasco invoked word of honor in his bid to take over the speakership post. But the person who brokered their term-sharing agreement, President Rodrigo Duterte, has distanced himself from the squabble, saying it is an internal House affair and left it to the legislative chamber’s membership to decide who their leader should be.

Apparently, the majority opted for the status quo because of the newfound reputation of the House as a pro-people chamber under Mr. Cayetano’s leadership. According to the latest survey conducted by the Social Weather Stations, 63% of Filipinos were satisfied and 12% were dissatisfied with the House’s performance. Its net satisfaction rating of 51% was a significant improvement in the chamber’s poll ratings that had plunged to negative levels under previous speakers.


In contrast, Mr. Velasco is an unknown factor with virtually no track record to show in almost a decade as representative of Marinduque’s lone district. When offered the position of Senior Deputy Speaker, he reportedly declined and thereby lost the opportunity to gain experience as a “speaker-in-waiting.” This merely reinforced his image as a political lightweight gunning after the speakership’s prestige and not for its job requirements.

Now that the majority has spoken, it is time for the House to buckle down to work and pass the 2021 General Appropriations Act. Then it can be transmitted to the Senate for ratification next month and signed into law by the President before the year ends — preventing another budget impasse that will be detrimental to our economic health.

After the Asian financial crisis of 1997, the Philippine banking industry was rocked by sudden closures and takeovers. One of several banks that were shut down by regulators was Unitrust Development Bank (UDB).

A thrift bank owned by the group of businessman Francis Yuseco, UDB had over 8,000 depositors and creditors when it was closed in January 2002 and placed under receivership by the Philippine Deposit Insurance Corp. (PDIC). At that time, PDIC said UDB had sufficient funds to pay all claims. Later it was placed under liquidation, but the Yuseco group cited the testimonies of three PDIC officials who claimed that the bank remained solvent and could still be rehabilitated.

More than 18 years after its closure, UDB’s case remains unresolved. The Makati Regional Trial court has scheduled a hearing next week to determine the remaining assets of the bank. In a Zoom interview, Mr. Yuseco expressed willingness to negotiate with PDIC in reopening the thrift bank along with the Monetary Board’s reinstatement of its licenses to operate 12 Metro Manila branches, a foreign currency deposit unit, and a trust banking unit.

Mr. Yuseco’s plan is to rebrand UDB as an infrastructure investment bank since his group has projects related to mass transit. In fact, he invented a mass transport technology known as Philtrak similar to the Latin American bus rapid transit (BRT) systems.  According to him, European investors have signified their interest to fund his Panay Island project that will convert a shuttered railway into a BRT trackway.

He firmly believes that “under the law, as long as you are solvent, you can be reopened, and it does not really matter how long you have been dormant” — always hoping for the best in the face of adversity.


J. Albert Gamboa is CFO of the Asian Center for Legal Excellence and chairman of FINEX Publications.