The government is readying a P1.17-trillion reserve fund to boost the Philippines’ fight against the coronavirus disease 2019 (Covid-19) pandemic, the country’s Finance chief said on Thursday.
During a meeting with the Inter-Agency Task Force for the Management of Emerging Infectious Diseases in Malacañang, Finance Secretary Carlos Dominguez 3rd said the government’s economic managers and the Central Bank had put together a monetary package of up P1.17 trillion or 5 to 6 percent of the country’s gross domestic product (GDP).
He added that the bulk of the funding would go “to support the economy,” while the rest would fund programs for “the most vulnerable in our communities” and assist the country’s health workers.
“We have a long breakdown of how we have this program. But, mostly, it was to provide subsidies for the low-income families and workers of the small and medium enterprises. We also spent a lot of money about P600 million for health care and Covid items and the Central Bank has provided P830 billion in liquidity for the economy,” he said.
President Rodrigo Duterte had directed Dominguez to look for additional funds to boost the government’s Covid response.
Duterte admitted that the P270 billion authorized by Congress would not be enough to cover government efforts, including relief programs for the poor and possibly middle-class families.
In a televised address early Thursday, the President said he would consider selling public properties if the government “runs out” of money for its Covid-19 response.
He mentioned state-owned institutions like the Cultural Center of the Philippines and the Philippine International Convention Center, which are both in Pasay City.
“Fighting this enemy is proving really costly. You don’t really see it, but everyone is affected and we’re being held hostage,” he said.
The President said the P275-billion fund still needed to be collected in the second and third quarters of 2020.
Duterte also admitted that the government had “no source of income now.”
“What is so exasperating is that we are trying our best… There’s no source of income now except, maybe, perhaps, our fixed assets, the government-owned buildings,” he said.
But Duterte bared that Dominguez assured him the government could generate funds to fight Covid-19.
If the funds still fall short, Dominguez said the government plans to borrow $5.6 billion from the Asian Development Bank and the World Bank.
“But we have a good credit rating, it even increased. We have BBB+ rating, the highest ever,” he noted.
The Finance chief admitted that the pandemic had hit the country “very hard,” and could lower the economic growth and raise the budget deficit.
He said 1.2 million workers would likely be out of jobs during the pandemic, but “this is in comparison with the lowest unemployment rate ever achieved in the Philippines.”
He predicted the budget deficit to widen from 3.2 percent to 5.3 percent.
“In other words, we will be spending more than we will be collecting. But we are spending more in order to save the people and make sure that they have food on the table during this time,” Dominguez said.
The country’s debt-to-GDP ratio would rise from 41 percent to 47 percent, “but that is still very low compared to our neighbors,” he added.
“We are working on our recovery or our bounce back program. But to do that, we have to analyze first what is the damage to the economy, so we have a survey,” Dominguez said.
He noted that the survey so far had 44,000 respondents.
Dominguez said financially, the country could bounce back from the Covid-19 crisis, but called for prudent spending.