Economic team’s stimulus package funds Bong Go’s Balik Probinsya

Aika Rey

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Economic team’s stimulus package funds Bong Go’s Balik Probinsya

Economic managers present to Congress a P711-billion fiscal stimulus package, but only P160 billion will be funded by government under new programs

MANILA, Philippines – Philippine economic managers are introducing a much smaller government-funded stimulus package to Congress, which heavily supports the Balik Probinsya, Balik Pag-asa program.

Presented as “PH-Progreso” to the House leadership on Thursday, May 7, the executive’s economic development cluster proposed a P711-billion fiscal stimulus package.

But here’s the catch: only P160 billion will be funded by the national government under new programs.

The rest is envisioned to come from current government spending, relaxed monetary policies, loans, and contributions from the private sector, among others.

Budget Secretary Wendel Avisado told Rappler that this is the “executive version” of the pending stimulus package bills at the House aimed at addressing the fallout from the coronavirus pandemic. “We’re still coordinating with Congress on what’s the best approach/action on the matter,” he said.

The gap between what the executive and legislative wants is huge.

Balik Probinsiya

The economic team’s P160-billion counterproposal, or “Bayanihan II,” is twice lower than the House’s P485-billion package, which lawmakers said should be funded entirely from government coffers. They argued the counterproposal is too small.

Bayanihan II’s proposed provisions include cash aid to 9 million families worth P30 billion and wage subsidy to 2.6 million workers worth P21 billion. Under the Bayanihan to Heal as One Act, 18 poor million families out of the 24 million total households in the country should’ve been able to receive cash aid from the social welfare department.

According to the presentation, a copy of which obtained by Rappler, the emergency aid and the wage subsidy programs, with a combined P51-billion allocation, will “prioritize” those in the provinces.

Asked for confirmation, Avisado told Rappler: “It is in support of the Balik Probinsya, Bagong Pag-asa Program.”

The Balik Probinsya, Balik Pag-asa program is Senator Bong Go’s new pet project, which aims to decongest Metro Manila as a long-term solution to the pandemic.

Go, longtime aide of the President’s, first proposed this during a Malacañang briefing on the general community quarantine. When Congress opened on Monday, May 4, Go’s resolution was approved at the Senate plenary. Two days later, President Rodrigo Duterte adopted this through an executive order.

‘Bayanihan II’

On Tuesday, May 5, the still-unnumbered House bill consolidated the economic stimulus packages separately filed by Marikina 2nd District Representative Stella Quimbo and Albay 2nd District Representative Joey Salceda.

The House’s proposed fiscal package is yet to be discussed at the plenary, but this amounts to some P485 billion to be funded by the national government. The bill includes some P130 billion wage subsidy, P20 billion for test kits, and assistance to tourism (P50 billion), transportation (P48 billion), and export and import (P44 billion) industries.

On Thursday, the finance and budget departments, including the socioeconomic planning agency, met with Speaker Alan Peter Cayetano, Majority Leader Martin Romualdez, Deputy Speaker Sharon Garin, Quirino 1st district Representative Junie Cua, Salceda, and Quimbo to present their proposed economic stimulus package.

The economic manager’s counterproposal is worth P711 billion or 3.8% of the gross domestic product (GDP) – but bulk of that will come from either slashing funds or removing some items from the House bill.

Only P160 billion will be funded by the national government, focusing on new programs. This proposal is another 0.9% of the GDP, which would widen the budget shortfall to 6.2% if approved.

The P160-billion proposal includes some P131-billion recovery package, allocating some P10 billion for the purchase of 3.5 million test kits and P50-billion capital to the National Development Company, Land Bank of the Philippines and/or Development Bank of the Philippines.

The economic team struck out funding for loans, which they said could be handled by government financial institutions at “low interest” rates. The House proposal included P50 billion for “zero” interest loans.

The economic team also wants provisions that would grant the executive the power to reallocate budget to priority Build, Build, Build projects, among other affected sectors, which was not part of the first Bayanihan Act. The economic team banks on the infrastructure push to revive the Philippine economy.

Can PH afford it?

Salceda said the economic team’s proposal is “not enough to stimulate demand” at 0.9% of the GDP.

Both Salceda and Quimbo told Rappler that the main issue raised during the Thursday’s meeting was affordability.

According to Quimbo, the House’s proposed stimulus package would introduce another 1.8 percentage points above the projected budget shortall in 2020, which would widen it to 7.1% of the GDP. This proposal is more than twice the initial target of 3.2%.

“We are still working out the details of the final proposal which will be submitted to Congress for debate. What needs to be determined at the point is what constitutes an acceptable deficit to GDP ratio,” the Marikina congresswoman added.

In April, University of the Philippines economists pushed the government to widen the fiscal deficit to deal with the pandemic. 

Economist Toby Monsod earlier told Rappler: “We breach the deficit, go to as high as 7%, then so what? We have to live with that deficit. What will count is how well you will spend the money you borrowed.”

On Thursday, the government announced that the Philippine economy contracted by 0.2% for the first quarter of 2020 due to the coronavirus crisis. The last time the economy contracted was 22 years ago, in 1998 during the extreme El Niño and Asian financial crisis.

Later on Thursday, Fitch Ratings lowered its outlook for the Philippines to “stable” from “positive” because of the pandemic. It still affirmed the country’s credit rating to “BBB” because of the “strong” medium-term growth prospects, even if it projected the economy to contract by 1% this year.

Much like the Philippines, coronavirus recovery measures has pushed Southeast Asian countries to widen their budget deficit, such as Singapore at 8.09% and Indonesia at 5.07%. Countries funded their coronavirus war chest through debt and tapping into reserves, among other measures. – with Mara Cepeda/

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Aika Rey

Aika Rey is a business reporter for Rappler. She covered the Senate of the Philippines before fully diving into numbers and companies. Got tips? Find her on Twitter at @reyaika or shoot her an email at