Finance Secretary Carlos Dominguez III said there will be no cash aid during the two-week modified enhanced community quarantine in Metro Manila and nearby provinces, as the revert to a stricter lockdown was not expected.

In a media briefing on Thursday, August 6, the economic team was asked whether there would be cash aid for residents under MECQ.

“It was not anticipated and it’s not in the budget. We’ll check if we can put it in the [proposed] Bayanihan 2 law,” answered Dominguez.

During the briefing, Dominguez reiterated that the government can only fund P140 billion for a stimulus package this year, P10 billion higher than earlier pronouncements.

The finance chief added that the package would total P180 billion if the proposed corporate income tax reform package – now Create bill, formerly Citira – is passed in Congress, which would amount to around P40 billion in “tax credits.”

“This stimulus package includes roughly P40 billion in tax credits for everybody. We want to lower corporate income tax by 5 percentage points and that will leave P40 billion in the hands of the private sector, more especially the MSMEs (micro, small, and medium enterprises),” Dominguez said.

The amount for the so-called “stimulus package” would be lodged under the Bayanihan 2 bill, a follow-up legislation to the Bayanihan to Heal as One Act which allowed the executive branch to reallocate budget items to fund the coronavirus response.

‘Stimulus package’

The version closest to what the economic team wants is the Senate version of the Bayanihan 2 bill, which has a standby fund of P140 billion.

There are no cash aid provisions under Bayanihan 2, though a combined P59 billion was allocated for subsidies and assistance for the labor, transportation, and tourism sectors. The Senate has already passed the measure on final reading.

The counterpart measure at the House of Representatives, meanwhile, was approved on 2nd reading, with a standby fund worth P162 billion. Aid under the bill, however, amounts to some P32 billion only.

Differences in the bills will be discussed during the bicameral conference committee, if the House decides not to adopt the Senate version.

The stimulus package amount has been met with criticism, as experts argue it will not be enough to push forward the economy.

Under the bill, some P50 billion is allocated for capital infusion to banks, which the economic team estimates to have a multiplier effect of 8 to 10 times, resulting in some P400 billion in economic activity.

Despite the supposedly earmarked amount under the Bayanihan 2 bill, the government is only anticipating P110 billion in additional disbursements, for a total of P4.34 trillion by the end of the year, according to a statement by the Development Budget Coordination Committee. – Rappler.com