MANILA, Philippines — The new P401-billion pandemic relief bill being pushed by the House of Representatives would, admittedly, do little to save the economy from the pandemic-induced slump. But for lawmakers, this is better than having nothing at all.
“I think, yes, it is still small but we have faith in this P400 billion spending that, for some way, it will ease the (economic) contraction,” AAMBIS-OWA Rep. Sharon Garin, one of the authors of the proposed Bayanihan to Arise as One Act or Bayanihan 3, said of the bill.
“So we really need this Bayanihan 3 because when the government spends, the multiplier effect from that is really significant,” Garin told a press conference on Wednesday.
Based on Garin’s estimates, the current form of Bayanihan 3 would only add “two points” to the country’s gross domestic product this year. This estimate assumes that for every P200 billion spent by the government, it would contribute a point to GDP. On Monday, the bill was overwhelmingly approved on second reading by the Lower House led by Speaker Lord Allan Velasco, who was among the 298 authors of the measure.
Once enacted into law, the bill would provide funds for coronavirus programs, including the dual-tranche distribution of P2,000 cash aid to each Filipino, regardless of social status. The measure would also provide wage subsidies amounting to P20 billion for those who lost their jobs due to renewed lockdowns.
The proposal comes in the face of the Duterte administration’s hesitation to unleash outsized stimulus packages over fears of incurring wide budget deficits that may trigger a credit rating downgrade. That said, analysts had doubts whether any new spending at this point would make a big difference, arguing that the government should have unleashed a convincing fiscal response at the onset of the pandemic so the economy could recover faster.
At the same time, the Constitution provides that all budget bills require a certification from the Bureau of the Treasury that there are enough funds for them. So far, economic officials led by Finance Secretary Carlos Dominguez III are open to adding P170 billion on existing spending to fund a much-needed rescue package. That was lower compared to the amount that lawmakers want, but Garin said that economic managers are willing to listen to them
“For me, if we can spend P1 trillion more, then good but we cannot afford that. Let’s find a way to better use our money,” she said.
“I think they (economic managers) were listening and they see the logic behind Bayanihan 3… It’s not that they don’t want it, it’s just that we have to arrive at the right number and right programs that we want to implement,” she said.