Gov't readies P300-B war chest vs global eco slowdown
abs-cbnNEWS.com | 01/08/2009 12:26 AM
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The Philippine government gave more details today about its P300 billion economic resiliency plan - its local version of a stimulus package that several countries have outlined to shield their economies from the impact of the global economic slowdown.
In a statement, the National Economic and Development Authority (NEDA) said the economic resiliency plan focuses on hiking government spending in the first half of 2009 to boost the local economy.
The plan focused on frontloading spending for the following priorities:
- Infrastructure
- Social protection
- Increasing capital stock
The planned frontloading and spending for the first half this year is expected to boost private sector confidence in the economy.
Socio-economic planning Secretary Ralph Recto said the plan will enable the economy to hit the ground running in 2009 and achieve the high end of the government's growth target for the year.
The Development Budget Coordination Committee forecasted a gross domestic product growth of 3.7 percent to 4.7 percent in 2009.
Frontloading
Recto noted that in the first half of 2008, the government, which accounts for 20 percent of the GDP, spent only 30 percent of its budget.
Thus, one component of the plan is aggressive public spending.
This means government agencies would spend 60 percent (about P84 billion) to 80 percent (about P112 billion) of the productive portion of their 2009 budget during the first six months.
Eight implementing agencies have been identified to implement this plan to frontload spending. They are: Department of Education, Department of Social Welfare and Development, Department of Health, Department of Agriculture, National Irrigation Administration, Department of Agrarian Reform, Department of Public Works and Highways, and Department of Transportation and Communication.
Congress, however, has yet to pass P1.4 trillion budget for 2009.
Nonetheless, Recto said the government would spend as much as it can in the first six months of 2009. "We may be able to take advantage of the window of opportunity in the first half," Recto said.
Infrastructure
A particular focus of the aggressive public spending is infrastructure.
Last December, when the P300 billion package was first bared to the public, Recto said the priority would be "easy to implement projects" like repair and rehabilitation of roads, hospitals, bridges and irrigation facilities, school and government buildings.
The socio-economic planning secretary said these would allow the country to gear up when the world economy recovers.
"(We have to) make sure these projects have high labor employment, high local value added, so that there is a multiplier effect among the different industries involved to ensure more jobs are saved, secured and created next year," Recto told reporters then.
During the first 2009 cabinet meeting in Iligan City on Monday, President Arroyo designated a number of Cabinet members to coordinate infrastructure programs in several provinces.
Meantime, Recto said the government is accelerating spending for fast, off-the-shelf infrastructure which has simple engineering requirements and no right-of-way problems.
"We are encouraging the government financial institutions, government-owned and controlled corporations, local government units and the private sector to participate in these infrastructure projects," he said.
Social welfare and investments
Recto shared the plan to increase the Department of Social Welfare and Development's allocation for conditional cash transfers or the “Pantawid Pamilyang Pilipino” program.
About P5 billion would be added to cover the additional 321,000 poor households giving them a maximum cash grant of P9,000 per year.
"We also want to add P1 billion for PhilHealth to ensure full national government contribution to the National Health insurance Program. We are also proposing to increase the allocation for the Technical Education and Skills Development Authority by P5.66 billion to cover an additional 565,980 beneficiaries," he said.
The government would also increase investments in Health Department's facilities. About P1.97 billion would be added to the budget for primary and secondary hospitals.
Private sector
Previously, the business group Philippine Chamber of Commerce and Industry (PCCI) said they would raise P100 billion to fund efforts to reduce the borrowing costs of those in the private sector.
By cushioning the impact of the tightening global credit on the local private sector players, PCCI hopes to entice their peers to proceed with their capital expenditure spending.
The private sector is major job generator.
It has been previously said that government financing agencies would also contribute some funds to ensure that credit and financing among those in the private sector would continue flowing.
Employment
The Philippines has been largely spared from the turmoil in the global financial sector but it could be hit by growing unemployment as some Filipinos working overseas lose their jobs when their host countries' economies take a dive.
Employment in the country is likely to be affected, too, especially in vulnerable export sectors, like electronics and garments.
Recto said the resiliency plan seeks to save and create jobs, protect the poorest of the poor, returning overseas workers, those employed in export industries, ensure low and stable prices to support consumer spending, and enhance competitiveness in preparation for the global rebound.
"The programs for OFWs abroad and those returning include redeployment to emerging foreign labor markets, development of new market niches, as well as repatriation assistance, when needed," he said.
Moreover, the government created a "payback package" for OFWs who were retrenched due to the global financial crisis.
This package includes the setting up of a P250 million support fund, skills training to avail of in-demand jobs in other parts of the world and setting up of Labor Department and Overseas Workers Welfare Administration desks in the provinces to match OFWs' skills with available jobs.
