Congress mulls breaking apart P1.3-T ARISE bill provisions
MANILA, Philippines — With one of the government’s preferred stimulus measures set to be passed this week, lawmakers are now considering putting a larger rescue package in the backburner, a win for economic managers who have persistently rejected funneling trillions of pesos to save the economy.
The P1.3-trillion Accelerated Recovery and Investments Stimulus for the Economy (ARISE) bill will not be passed on its current form, and instead will see its components divided into small pieces “and separate packages,” Albay Rep. Joey Salceda said.
“The irony there is that when you piece all of the interventions together, it ends up looking like ARISE, only in separate packages with some delays,” Salceda, ARISE’s co-author, said in a text message on Monday.
“My position has always been, the earlier and more decisive the stimulus, the better the economic results for cheaper fiscal costs,” he added.
ARISE successfully passed the House of Representatives way back in June, but disagreements with economic officials on acceptable costs for fiscal stimulus, over fears a costly program would pose threats on investment-grade credit ratings, left a counterpart Senate bill unintroduced to date.
Senate President Vicente Sotto, in a separate text message, vowed still to tackle the bill, but Acting Socioeconomic Planning Secretary Karl Kendrick Chua tempered expectations ARISE would come out of the upper chamber in its House’s form.
“The Executive has briefed the Senate already on ARISE and (we) hope they can consider it already,” Chua said in a Viber message, without going into specifics. “ARISE is part of the recovery program and we hope that can be passed soon.”
As it is, Salceda said the process of breaking ARISE apart and inserting its provisions elsewhere has begun. The Bayanihan to Recover as One bill, set to be ratified by the Lower House later on Monday, for instance would see private schools getting assisted and small firms getting aided through collateral-free loans. Under the original ARISE measure, loans were supposedly interest-free as well.
“We fought hard to get key ARISE provisions in the Bayanihan II,” Salceda said. “We will eventually see the entire program passed either in full, or in piecemeal fashion.”
Economists and former government officials have called for the passage of ARISE as a convincing stimulus measure to counter the coronavirus’ economic impact. Without ARISE, as per the International Monetary Fund, the Philippines has allocated 3.1% of gross domestic product as fiscal stimulus, behind Indonesia’s 4.4% and Vietnam’s 3.7%. Jakarta and Hanoi notched better GDP performance than Manila in second quarter.
But Chua and Finance Secretary Carlos Dominguez III have consistently been cool to ARISE given its hefty price tag that they say is “unaffordable” and risks damaging the government’s perceived capacity to settle its debts. Instead, they pushed for Bayanihan II with a smaller additional allocation of P165.5 billion, P20 billion of which would also be on “standby” pending revenue sources to be determined by the finance department.
Dominguez did not reply to request for comment.
Other stimulus measures
How effective ARISE’s provisions would be when separated remains unclear, especially since as it appears, economic managers would want legislators to keep spending controlled even while ARISE’s programs are distributed to other bills.
Apart from Bayanihan II, the Duterte administration is also pushing for the passage of the long-delayed Corporate Recovery and Tax Incentives for Enterprises Act, which cuts corporate income levies by an instant 5% while keeping most fiscal perks untouched for longer periods to help companies save up some costs.
There is also the Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery (GUIDE) as well as the Financial Institutions Strategic Transfer (FIST) bills, which aim to remove the pressure of bad debts on banks, one of which is through higher capitalization, so that they can lend more to businesses.
Salceda batted for CREATE’s swift passage.
“I’ve been in the markets for most of my pre-political life and it hates indecision. A bad decision is even better than no decision because until the information isn’t available, you can’t take the proper response,” he said.
“So the delays in CREATE have been totally bad for business and the economy,” he added.
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