MANILA, Philippines — Even before Congress has approved the government’s budget for 2021, the Department of Budget and Management (DBM) has begun planning to spend a record P5.024 trillion in 2022 to revive and hopefully stimulate the country’s P18.2-trillion economy.
Budget Secretary Wendel Avisado said the DBM would issue the budget calls next week for the 2022 spending program that will focus on health care as well as projects that would help the economy rebound from its pandemic-induced recession.
The country’s economic managers had earlier predicted that economic production, or gross domestic product (GDP), would contract by a record 8.5 percent to 9.5 percent this year because of COVID-19 quarantine measures.
But the economic team is hoping that, once a COVID-19 vaccine is widely available, the economy would recover the P1.2 trillion it lost to the pandemic with a growth of 6.5 percent to 7.5 percent and further grow in 2022 by 8 percent to 10 percent, a feat never accomplished in Philippine economic history.
Avisado did not specify how the Duterte administration hopes to accomplish the feat in its remaining months in office, but Finance Secretary Carlos Dominguez III said next year’s national budget, as well as the extension of the validity of the 2020 budget and the Bayanihan to Recover as One Act, provides the government with about P213 billion still unspent for stimulus measures in 2021.
Bigger stimulus pushed
Dominguez also said the government would continue to control the budget deficit, which was programmed at 7.6 percent of GDP in 2020 from the earlier 9.6 percent.
Some economists and legislators have been pushing for a bigger stimulus as the damage wrought by the pandemic on the economy was already huge.
The Manila-based Asian Development Bank (ADB) on Friday said that “for economies that had particularly severe second-quarter downturns and prolonged outbreaks and lockdowns, estimates of the 2020 impact on consumption and investment are now larger.”
“This is most evident for India and the Philippines, where 2020 consumption is expected to be 12 to 15 percent lower and investment about 25 percent lower than pre-COVID-19 expectations,” ADB said in a report titled “The Impact of COVID-19 on Developing Asia: The Pandemic Extends into 2021.”
The Philippines’ GDP fell by a record 16.9 percent year-on-year during the second quarter, as the most stringent lockdown in the region was imposed from mid-March to May, shutting down 75 percent of the economy which led to job losses and temporary business closures.
Allocation
In the still-pending 2021 budget, 9.9 percent larger than the P4.1 trillion allotted for 2020, the agencies with the biggest allocations were the Department of Education, Department of Public Works and Highways, Department of the Interior and Local Government, Department of National Defense, Department of Health, Department of Social Welfare and Development, Department of Transportation, Department of Agriculture, the judiciary, and the Department of Labor and Employment.
Its bulk, or 36.9 percent, was set aside for the social services sector amounting to P1.664 trillion.
The economic services sector will receive the second-highest allocation with P1.347 trillion, or 29.9 percent of the budget. —WITH A REPORT FROM LEILA B. SALAVERRIA