MANILA – Department of Finance Secretary Carlos Dominguez III disclosed Thursday that the country has enough funds and other sources of funds for its fight against coronavirus disease 2019 (Covid-19). This was reported by the secretary during a late night televised cabinet meeting with President Rodrigo Duterte in Malacañang Palace to discuss the progress of the utilization of the already released Php100 billion social amelioration fund under the Bayanihan Law.
Early this week, the president had tapped his economic team to find ways to augment the current PHP275-billion budget for the Covid-19. He feared the national government did not have sufficient funds to address raging pandemic in the country. Duterte, in his address to the nation, said he had also directed officials to “explore options” to realign the budget for Covid-19 response by reducing or removing the allocations for several projects.
Domiguez said that while the country’s financial coffer is not limitless, it can withstand the threats of the present pandemic because of the conservative policies followed by the government on fund utilization. “We are confident that we have the financial capability to bridge this problem that Covid-19 has brought us. So we assure our citizens that we have the money although we have to realize that hindi naman endless ang pera na ito so kailangang gamitin natin ito correctly and not for wasteful expenditures,” he said.
The secretary further said the country is well prepared of any eventuality despite the “bad luck” brought about by Covid-19 because of the conservative government spending policy that the president infused at the start of his administration.
The average growth rate of the country is 6.4 percent and the collection of government income is highest in 22 years as a percentage of its growth. The current national debt has gone down to the lowest in relation to the Gross Domestic Product (GDP) which is pegged at 41.5 percent from 70.0 percent of the GDP before. Inflation rate has also gone down to 2.5 percent last month which is within the country’s target of 2 to 4 percent.
However, Dominguez confessed that Covid-19 has hit the country in a “very hard way.” He estimates that the country’s GDP growth this year will go down to 0 or -1 percent. The temporary unemployed workers will be 1.2 million which is so far the lowest unemployment rate ever achieved in the Philippines. The budget deficit will also raise from 3.2 percent to 5.3 percent which means the country is spending more than its capacity to collect. But he justified that the country is spending more for the purpose of saving the poor and ensuring that they have food on the table.
He also announced that economic managers of the country and the Bangko Sentral ng Pilipinas have put together a fiscal and monetary action valued about Php1.17 trillion which amounts to 5 to 6 percent of the GDP mostly as subsidies to low income families and workers of small and medium enterprises. About Php600 million of the said funds will be for health care and about Php800 million for liquidity of the government.
As recovery or bounce-back program, Dominguez said the DOF has considered borrowing more money to support the Philippine economy and the fight against Covid-19. “Right now we are tapping our friends at the Asian Development Bank and the World Bank for borrowing of probably US$5.6 billion. If this is not enough, we can go to commercial market,” Dominguez added. He believes the country can easily get additional funds due to its high credit rating.
