THE government estimates that around P846 billion in additional stimulus is needed to revive the economy, which will see around P2.2 trillion in losses so far this year due to the pandemic.
“We have also looked at the numbers, and it appears that to fully recover, the government would be needing P846 billion worth of initial stimulus,” Socioeconomic Planning Acting Secretary Karl Kendrick T. Chua said during the Financial Executives Institute of the Philippines (FINEX) online forum on Thursday.
Based on Mr. Chua’s presentation, the total gross value-added losses this year could hit P2.2 trillion, which includes P1.919 trillion in losses from profits and wages.
Based on these estimates by the National Economic and Development Authority (NEDA) and the Department of Finance (DoF), the economy is seen to contract by as much as 3.4% this year or 2% at best.
To help the economy get back on track, Mr. Chua said the additional stimulus needed is valued at P846 billion that has a 2.27 multiplier effect, and equivalent to 4.4% of gross domestic product (GDP).
“The good news here is we don’t need to put everything in the national government’s budget,” he said.
Mr. Chua said only P173 billion, equivalent to 0.9% of GDP, will be spent by the government through its fiscal stimulus program under the proposed Philippine Program for Recovery with Equity and Solidarity. He said this could push the budget deficit to nine percent levels, higher than the earlier projected of 8.1% but is still “sustainable.”
“However, let’s not forget we can use savings, off-budget, monetary policy, financial sector regulatory relief, and also the private sector can contribute the balance of P673 billion (3.5% of GDP) so the whole idea is we work together within government and also as a whole nation,” he said.
Congress is considering the P1.3-trillion Philippine Economic Stimulus Act (PESA) Bill, which allots P568 billion worth of new programs to be rolled out within the year.
On the monetary side, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said they are currently studying additional measures to “ensure sustained soundness, stability resiliency and inclusivity” of the banking community.
Mr. Diokno said the central bank is also considering tweaks to New Central Bank Act to strengthen supervision over financial conglomerates as among the legislative measures they are eyeing post-COVID-19.
Meanwhile, restarting the “Build, Build, Build” program has been touted as one of the largest stimulus programs of the government due to its multiplier effects and ability to create jobs.
Presidential Adviser for Flagship Programs Vivencio B. Dizon said they are now reprioritizing the flagship program in line with the “new normal.” He said they are assessing the available fiscal space the state has for infrastructure projects this year up to 2022, as well as the readiness of projects, and the implementation capacity of line agencies.
“We also have to ask the help of the private sector because clearly, the government cannot do this alone,” he said.
Mr. Dizon identified some major infrastructure projects that the government will still continue.
Projects that are still set for completion this year are the Metro Manila Skyway stage 3 project, the Harbor Link project, and the new terminal building at the Clark International Airport.
Also for this year’s completion are Light Rail Transit Line 2 East Extension project and the Bonifacio Global City to Ortigas Center Link Bridge project. — B.M.Laforga