Philippines May Spend Up To ₱200 Billion In Coronavirus Stimulus
A finance official of President Rodrigo Duterte has said in an interview that the economic managers will do “what it takes” to rescue the economy from the coronavirus pandemic, even if it means borrowing more than what they have programmed. The budget deficit could exceed 3.6 percent of gross domestic product.
Meanwhile, Manila is also in talks with the World Bank and the Asian Development Bank to make available up to US$2 billion in financing. According to Finance Assistant Secretary Tony Lambino in an interview with ANC:
We’re gonna do what it takes, that’s what the economic managers have said, to get out of this crisis and help Filipino families get through it.
He added that they will spend more than what is initially expected, just like how many other countries in the world are doing right now. The pandemic will lead to a significant drop in revenues, especially with the Bureau of Internal Revenue (BIR) pushing back its deadline for income tax filing by 1 month to April 15, a few days after the end of the Luzon-wide enhanced community quarantine.
Nomura chief economist for ASEAN Euben Paracuelles said that to rescue the economy from the coronavirus pandemic, the Philippines will need a “sizeable” supplementary budget. The pandemic is expected to exact a “heavy toll” on Southeast Asian economies.
He further cited that restrictions on public movements will cause a “significant economic disruption” and “public fear factor” will crimp spending overall. Prior to the expansion of the quarantine measures to the entire Luzon, Paracuelles has already downgraded his 2020 economic growth forecast for the Philippines to 5.6 percent from 6 percent.
In an interview with ANC, Paracuelles said:
What’s still needed is a sizable supplementary budget that needs to be passed and passed quite urgently. That’s the missing link at this point.
President Rodrigo Duterte on Tuesday signed a law granting him special powers, including reallocating billions of pesos in the current ₱4.1 trillion budget to equip the Department of Health and give 2 months of cash subsidies to 18 million families.
Aside from realigned budget items, the government will also draw from unused allocations and funds from government corporations. The government can spend up to ₱200 billion in the stimulus. The ₱27.1-billion COVID-19 package announced before the Luzon lockdown will be included in the ₱200 billion package.