MANILA, Philippines — After senators balked at enacting a third version of the Bayanihan pandemic response law, the country’s chief economist said there might not even be a need for additional stimulus legislation if quarantine restrictions were eased further and the economy moves faster.
“In my view, it is not necessary if we will open the economy further,” Socioeconomic Planning Secretary Karl Kendrick Chua said in a radio interview when asked if Bayanihan 3 was still needed.
“The strongest and most cost-effective way to restore confidence in the economy, consumer confidence, is to open the economy,” Chua said, noting that the record P4.51-trillion national budget for 2021 set aside a “huge” amount for social protection.
“Bayanihan 3 is no longer urgent so long as we open the economy and use our budget to help those who are in need,” Chua added.
Sen. Juan Edgardo Angara, chair of the Senate committee on finance, remained cool on the proposals to pass another law because government agencies have not even fully utilized the funds under Bayanihan 2, so Congress cannot really determine the need for another stiumulus package.
“What we know is that the funds of the Bayanihan 2, which is meant as assistance to small businesses, have yet to be fully utilized. Releasing the funds under the laws passed by Congress will be faster than enacting a new law,” he said in a radio interview.
ADB warning
Angara did not say when his committee will start to tackle its own version of Bayanihan 3, even as the House of Representatives are already in the thick of plenary deliberations on the proposed Bayanihan To Arise As One Act.
Senate Pro Tempore Ralph Recto filed Senate Bill No. 1953, which aims to provide P485 billion in new funding to “help the country bounce back” from the COVID-19 pandemic.
The Bayanihan 3 measure in the House, authored by Marikina Rep. Stella Luz Quimbo, seeks to provide a P420-billion fund to help the country recover amid the economic crash triggered by the COVID-19 pandemic.
But senators earlier aired dismay over the slow implementation of programs funded by the Bayanihan 2, even after they have already extended its validity until June 30, 2021.
But the Manila-based Asian Development Bank (ADB) warned that poverty may again resurge to above 20 percent if struggling households don’t get financial aid.
‘Poverty rate could climb’
In its Feb. 19 report on the utilization of the loan proceeds from the COVID-19 Active Response and Expenditure Support program it extended to the Philippines last year, the ADB said that “without substantial financial support to poor and vulnerable families, the poverty rate could climb to 20.7 percent in 2020.”
“Even if economic growth returns to its long-term trend in 2021, there is a risk that the poverty rate will decline only marginally to 20.2 percent by the end of 2021, reflecting the lasting effects of the pandemic,” the ADB said.
But Chua, who heads the state planning agency National Economic and Development Authority, said recent studies showed that areas outside Metro Manila which had been under modified general community quarantine (MGCQ) saw their hunger rate decline to 15 percent from 34 percent since they reopened their local economies.
The unemployment rate in MGCQ areas also dropped to 7.7 percent from 18.6 percent “in just a matter of three months,” Chua added.
But economic managers also fear that additional spending under the proposed Bayanihan 3 would bloat expenditures and the fiscal deficit.
Economic managers had said the 2021 budget, as well as the extended validity of the 2020 budget and the Bayanihan to Recover as One Act, would suffice to fight the health and socioeconomic crises inflicted by COVID-19.