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60-80% of spending set in 1st half in economic package

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Business Mirror | 01/08/2009 9:45 AM

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The National Economic and Development Authority (NEDA) bared on Wednesday the framework for the P300-billion economic-resiliency plan that “intends to upgrade infrastructure and capital stock and expand social protection.”

The resiliency plan hopes to ensure sustainable growth and attain the higher end of the growth targets for the year. The Development Budget Coordination Committee has pegged growth for 2009 at 3.7 percent to 4.7 percent.

The plan—the country’s own stimulus package to counter the global economic crisis—was based on President Arroyo’s desire for the country “to hit the ground running in 2009” in response to the global economic crisis.

It aims to save and create jobs; protect the poorest of the poor, returning overseas Filipino workers (OFWs) and workers in export industries; ensure low and stable prices to support consumer spending; and enhance competitiveness in preparation for the global rebound.

One of the components of the plan, Socioeconomic Planning Secretary and Neda Director General Ralph Recto said, involves spending 60 percent to 80 percent of the productive portion of the 2009 budget of implementing agencies during the first semester, with particular focus on the infrastructure sector.

He said that in the first semester of 2008, the government, which accounts for 20 percent of the country’s gross domestic product, spent only 30 percent of its budget.

The planned front-loading and spending for the first half of 2009 is expected to boost private-sector confidence in the economy.

He 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,” Recto said.

“The government should also improve revenue collection through better tax administration,” he added.

To stimulate the export sector, Recto said the government has implemented programs to encourage exporting firms to diversify, innovate and upgrade their products.

He added: “So far, we have provided tax relief for the private sector by reducing corporate income tax from 35 percent to 30 percent and exempting minimum- wage earners from personal income tax and increasing personal exemption of nonminimum-wage earners.”

He said the government is proposing to increase the Department of Social Welfare and Development’s allocation for conditional cash transfers, or the Pantawid Pamilyang Pilipino program, by adding P5 billion for the additional 321,000 poor households giving them a maximum cash grant of P9,000 per year.

Another P1 billion will be added for PhilHealth to ensure full national government contribution to the National Health Insurance Program.

Allocation for the Technical Education and Skills Development Authority will likewise be increased by P5.66 billion to cover an additional 565,980 beneficiaries, he said.

Facilities of the Department of Health  will also be increased by adding P1.97 billion for primary and secondary hospitals.

Likewise, about P100 billion will be created with the private sector to lower borrowing or financing costs for capital-expenditure spending.

“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,” Recto said, adding that enhanced reintegration services and livelihood assistance are also made available for returning OFWs.

The government also created a “payback package” for OFWs who were retrenched due to the global financial crisis. The 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 Department of Labor and Employment and Overseas Workers Welfare Administration desks in the provinces to match OFWs’ skills with available jobs, among others.