The prospect of a higher 2020 spending has been laid out as Department of Finance Secretary Carlos Dominguez III noted on the possibility should it is deemed necessary.
“At this point, we are doing a bounce back plan for our economy and essentially, we are assessing the economic damage. We’ve done surveys and so far, we have 40,000 respondents,” Dominguez said in an interview with Consumer News and Business Channel (CNBC).
“So we will be putting together a comprehensive package and it is likely that we will go to our Congress to seek a higher budget for the rest of 2020 and most likely for 2021.”
The DOF has already gathered some $23 billion, or about P1.16 trillion, to finance efforts to contain the dreaded coronavirus disease (COVID-19) as well as to support the economy.
“The legislature gave the President the power to reallocate funds within the budget and the primary purpose is to support the most vulnerable…we have allocated a total of $6 billion for that (and) $650 million to the front-liners (to) support the battle against the virus,” he explained.
“Finally, together with our monetary authorities, we have allocated $16.4 billion to support the economy, so the total value is about $23 billion so far or between 5 to 6 percent of the GDP (gross domestic product),” he added.
The Finance chief said they also have ongoing negotiations with various multilateral lenders such as the Asian Development Bank, World Bank and Asian Infrastructure Investment Bank.
While the full extent of COVID-19 in terms of damage and timeline remain uncertain, Dominguez said the government will continue pushing for its priority programs, particularly the ambitious Build, Build, Build program.
As such, the Finance chief said that tapping their priority program funds for reallocation will be the last to be considered.
“That is the last item that we will touch because we know that our infrastructure spending is the gasoline that will restart this economy and we are very hesitant to move money out of the infrastructure expenditure field,” he said.
“That is our ace in the hole and we are moving other monies such as the extra funds we have with our GOCC (government-owned and -controlled corporations) and projects that have been abandoned in the government,” he added.
Meanwhile, the Cabinet official said that the extension of the imposed enhanced community quarantine will definitely dent the economy as businesses and other important sectors will be affected.
“We are projecting a zero to possible 0.8 percent negative growth this year. Definitely businesses are impacted, especially in the tourism sector as well as the retail sector,” Dominguez said.
“Tax collections are definitely going to be lower than our original target. But again, these are things that we can finance,” he added.
To recall, various institutions such as banks and credit rating agencies have lowered their GDP projections for the Philippines, all falling below the government’s original 6.5 to 7.5 percent growth target for the year.