GFIs, GOCCs to provide half of P100-billion stimulus fund

MANILA, Philippines – The government is set to source half of the P100-billion economic stimulus package this year from government-owned and controlled corporations (GOCCs) as well as government financial institutions (GFIs), Finance Secretary Margarito Teves said the other day.

Teves told reporters that only half of the proposed stimulus package would come from the 2010 national budget that was approved into law by President Arroyo last Feb. 9 while the other half would be sourced from state-run enterprises.

“Only P50 billion will be incorporated in the national budget,” Teves said.

According to him, possible sources of fund for the pump-priming activity include state-run investment arm National Development Co. as well as GFIs Land Bank of the Philippines and Development Bank of the Philippines, among others.

It was not clear, however, whether funds of pension fund managers Government Service Insurance System (GSIS) and Social Security System (SSS) would be used to bankroll the pump priming activity.

In 2009, the Arroyo administration launched a P330-billion stimulus package dubbed as the Economic Resiliency Plan that helped cushion the full impact of the global economic meltdown.

The Philippines avoided recession after its domestic output as measured by the gross domestic product (GDP) expanded by 0.9 percent, although slower than the 3.8-percent growth registered in 2008.

Of the amount that would be sourced from the P1.541 trillion budget, Teves explained that about P40 billion are allocated for infrastructure projects. About P10 billion would be used to finance infrastructure projects damaged by tropical storm Ondoy and typhoon Pepeng.

On the other hand, the finance chief added that the remaining P10 billion would come from revenue stream that would bankroll the 2010 national budget.

Last Monday, Teves announced in a conference arranged by the Asian Development Bank (ADB) that the government was spending P100 billion to fund a second stimulus package to sustain economic growth.

Economic managers through the Cabinet-level Development Budget Coordination Committee (DBCC) sees the country’s GDP expanding between 2.6 percent and 3.6 percent this year from 0.9 percent last year due to the continued global economic recovery.

Teves pointed out that the additional spending would be concentrated on major infrastructure projects such as telecommunications, power, and water.

He clarified that the government would not resort to additional borrowings to finance the pump priming activity.

Despite the additional spending, the government hopes to trim the country’s budget deficit to P293 billion or 3.5 percent of GDP this year from a record high of P298.5 billion or 3.9 percent of GDP last year through improved collections by the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC).

The stimulus package implemented by the Arroyo government bloated the country’s budget shortfall to a new all-time high last year eclipsing the previous record level of P210.7 billion or 5.3 percent of GDP booked in 2002. –Lawrence Agcaoili (The Philippine Star)