P10-B as a ‘rescue package’ for pandemic-hit firms ‘a joke’ – Drilon
MANILA, Philippines — Senate Minority Leader Franklin Drilon on Wednesday questioned the “drop in the bucket” P10-billion funding for a “rescue package” to aid pandemic-hit companies, pointing out that the amount is only half of the amount allocated by the government for its anti-insurgency task force in 2021.
Drilon raised this as the Senate subcommittee on Banks, Financial Institutions and Currencies tackles the proposed Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery (Guide) Act.
“Either we add more funds or we struck out this program because it does not help us. I would favor that we increase the amount of money that we can lend to SICs (strategically important companies) rather than allocate our funds in such activities as anti-insurgency run by politicians,” Drilon said.
“Given the size of the contraction of our economy, among the worst in the world, 9.5 percent of GDP (gross domestic product), which is about P1.5 trillion, P10 billion as a rescue package is a joke,” he added.
‘Where are our priorities?’
He pointed to the P19-billion budget allocated to the National Task Force to End Local Communist Armed Conflict (NTF-Elcac) for 2021.
“I raise the issue of priorities. We have P19.5 billion in an anti-insurgency fund, we have P10 billion to assist SICs,” Drilon said.
“Where are our priorities?…P10 billion is just one-half of the anti-insurgency fund of P19.5 billion—which is to me is a pork barrel—and yet here we are, trying to scrape the bottom with a P10-B fund SICs for investment through the special holding company,” he added.
Under the Guide bill, P7.5 billion will be infused into Land Bank and P2.5 billion into DBP so they can establish a special holding firm that will assist in rehabilitating SICs suffering from solvency problems amid the pandemic.
At least 15 SICs are being eyed for equity infusion under the Guide bill.
During the hearing, Land Bank of the Philippines assistant vice president and chief market economist Guian Angelo Dumalagan said the 15 SICs could lay off a total of 119,403 employees if these firms “completely fold up” or stop operating due to the pandemic without equity infusion.
“These numbers here are direct declines in employment, these SICs have very strong forward and backward linkages,” Dumalagan said.
“If these companies would fold up, those companies that are depending on these companies might probably show some contraction in their employee level as well,” he added.
Why only P10 billion?
National Treasurer Rosalia de Leon told senators that the country’s current fiscal position could only afford P10 billion under the Guide bill.
“But as shown in the presentation, this P10 billion, if you would also look at it in the vantage point of the upstream and the downstream by linkages, it could also redound to about a quarter of our GDP out of our P21 trillion expected GDP for 2021,” De Leon said.
“Kahit po ganun na small amount that we are providing for these SICs, given po yung kanilang importance to the economy, malaki po ang kanilang magiging resulta if we will not also assist these companies,” she added.
(even if the amount we provide these SICs is small, given their importance to the economy, the results are big if we will not also assist these companies.)
Drilon agreed with the need to help pandemic-hit SICs but pointed out the need to provide more funding to assist them.
“If we are going to assist—and I think we should assist—we should provide more assistance provided there are safeguards. ‘Wag naman yung P10 billion lang,” (not just P10 billion) he said.
