Bayanihan must be deficit neutral

Economic managers needed to work with members of Congress to look for sources of funds to apply on the various subsidies that will be provided through the new Bayanihan stimulus package.

“If we are going to have another round of Bayanihan stimulus package, the economic team will work with Congress on looking for funding sources to ensure that it will not further widen our deficit,” Finance Secretary Carlos Dominguez III told finance reporters in a viber message.

“Our goal, in keeping with the President’s policy of prudent fiscal management, is to keep our budget deficit within a manageable level. Hence, we want any additional expenditure to be deficit neutral,” he added.
During a Senate hearing this week, the Finance chief expressed the government’s concern about the rise in hunger and poverty, noting the need to address the issues “squarely and soon.”

No new taxes

Nevertheless, Dominguez said the government is “internally looking” for funding sources for the required P170 billion to P173 billion for Bayanihan 3.

Cabinet officials said they are not proposing any new tax hikes or measures but they remain open for any potential revenue-raising measures that Congress will propose.

“The Department of Finance (DoF) has not proposed any tax hikes to increase revenue collections. We have taken actions to increase the dividend remittance of government-owned and -controlled corporations to generate more funds,” Dominguez explained.

“In addition, the President has issued Administrative Order 41 directing all agencies to identify savings from their respective appropriations under the 2020 national budget,” he added.

These steps will ensure that any additional stimulus package would be adequately funded and backed up by available fiscal resources, he said.

Finance Undersecretary Gil Beltran earlier said the DoF is readying a list of new tax measures, most of which are directed to the untaxed sector like digital transactions, which they hope to be looked at by the next administration.