MANILA, Philippines — The government has released P376.57 billion in funds to key agencies for their coronavirus disease response efforts, the Department of Budget and Management (DBM) reported yesterday.
According to data from the DBM as of Aug. 10, the bulk or P266.53 billion of the total allotment releases came from savings generated from discontinued programs, activities and projects.
Some P100.19 billion came from special purpose funds, while another P9.85 billion was sourced from regular agency budgets.
In terms of recipient agencies, P200.98 billion of the total releases went to the Department of Social and Welfare Development for the implementation of the Social Amelioration Program.
The Department of Finance also received P88.13 billion for the Small Business Wage Subsidy program and Bayanihan grants to local government units.
Funds released to the Department of Health reached P48.98 billion, while the Department of Labor and Employment and Department of Agriculture received P12.58 billion and P11.39 billion, respectively.
The Department of Education was also allocated P10.91 billion, followed by the Department of National Defense with P1.36 billion, and Department of Public Works and Highways with P842.66 billion.
Other agencies that received additional funds for COVID-19 response include the Department of the Interior and Local Government, University of the Philippines - Philippine General Hospital, Department of Trade and Industry, Department of Science and Technology, Department of Foreign Affairs, and Office of the Presidential Adviser on the Peace Process.
Under the Bayanihan to Heal as One Act which expired last June 25, President Duterte was authorized to discontinue programs in the 2019 and 2020 General Appropriations Act to generate savings for COVID-19 response.
He was also authorized to reallocate or realign cash, funds, investments, including unutilized subsidies held by government-owned and controlled corporations to address the health emergency.
In a speech addressed to the Philippine Chamber of Commerce and Industry, Finance Secretary Carlos Dominguez said the Philippines fared well against some economies “despite not having the biggest stimulus package and even with the strictest lockdown.”
“This is not the usual economic crisis, where a larger stimulus package translates into a milder recession. For instance, we have seen that there doesn’t seem to be a direct correlation between the size of one’s stimulus package and the drop in GDP,” he said.
He cited Malaysia, whose economy contracted by 17.1 percent in the second quarter despite having a stimulus package equivalent to 18.2 percent of their gross domestic product.
The finance chief said the United Kingdom had a stimulus package equivalent to 23.4 percent of its GDP, but its economy went down by 21.7 percent; while Sweden’s economy decelerated by 8.2 percent in spite of a stimulus package between 10.8 to 16.6 percent of GDP.
“Only Thailand and the Philippines had stimulus packages lower than the drop in their GDPs. In particular, the Philippines’ stimulus package is between 4.2 to 6.4 percent of GDP, yet our GDP drop is 16.5 percent for the second quarter of this year,” Dominguez said.
“It appears that no matter how much money countries pump into their economies, their GDP would have shrunk massively, anyway. It is not the sheer size of the stimulus package that matters now but also whether it is actually saving the productive parts of the economy. This is because the problem is not a systemic contraction or a cyclical bust. Simply, necessary mobility restrictions hamper aggregate demand,” he added.
Dominguez said the Duterte administration is supporting a “fiscally responsible” Bayanihan To Recover As One or Bayanihan 2 bill, which will provide another round of fiscal measures to stimulate consumer demand and support economic recovery.