Noynoy rehashes budget items into P72-B stimuli

The government unveiled a P72-billion package to stimulate the weakening economy but the details of the program showed that most of the projects were already incorporated in the 2012 budget and were reclassified as components of scheme.

The Palace, nonetheless, said President Aquino has approved the P72-billion stimulus package for various infrastructure and reconstruction plans, saying it will produce multiplier effect on the economy.

Aquino cited P5.5 billion on various infrastructure projects under the Department of Public Works and Highways (DPWH); and P4.5 billion will go to the Metro Rail Transit and P1.868 billion will go to the Light Rail Transit (LRT) under the plan.

The package will be spent on projects that will have high macroeconomic impact, and will help the poor.

The government needs to disburse a total of P170 billion a month in a bid to ramp up the economy and meet the programmed expenditure level of P1.617 trillion by year-end, Sen. Franklin Drilon said Wednesday.

Drilon, chairman of the Senate finance committee, said that accelerated spending plans during the remaining months of the year could translate to next year’s growth, as Aquino unveiled a P72-billion stimulus program to boost the economy.

“Personally, I’m not very optimistic that the government can spend P170 billion per month until December. That remains to be seen,” Drilon said.

“I express serious doubt on the ability of the government to accelerate spending… given the January-August disbursements,” said Drilon during a briefing by the Development Budget Coordination Committee.

“The P72 billion will have its own multiplier effect and this pump primes the economy to that extent,” Aquino said during an open forum with the officers and members of the Foreign Correspondents Association of the Philippines (Focap) yesterday at the Mandarin Oriental Hotel, Makati City.

The President pointed out that the stimulus package aims to help reach the growth targets for 2011 and 2012.

However, Aquino acknowledged the fact that the country may be affected by the global economic meltdown. “The global economic situation is changing practically daily. And one is not isolated from the world economy. Therefore, things that we do here domestically would impact on economy positively. But, at the same time, we are not sure exactly what the negative effects of the world’s economic turmoil will have on us since it is still a developing story,” Aquino said.

Aquino said the LGU support fund amounting to P6.5 billion is part of the stimulus package. He added the government will give an additional P10 billion to resettle and relocate informal settlers and families in danger zones.

January-August disbursements stood at P947.2 billion. The slack in state spending resulted to an economic growth of only four percent in the first half, below the target of seven to eight percent.

“Given the lateness of the year, the effect on the domestic economy due to this accelerated public spending may be felt next year,” Drilon told economic managers as he expressed concern on the underspending. Drilon noted that economic managers may be prioritizing prudent spending to manage budget deficit for a better credit rating.

Apart from the stimulus package for infrastructure and reconstruction plans, Budget Secretary Florencio “Butch” Abad said that state agencies with infrastructure projects have been told to rollout the programs immediately. Abad added that Public Works Secretary Rogelio Singson “committed” that about P80 billion worth of projects will be implemented by December.

Despite Drilon’s misgivings, economic managers are confident that accelerated spending in the last quarter would help the government meet its programmed GDP growth of 4.5 to 5.5 percent this year, a revision from an earlier 5 to 6 percent growth.

Socioeconomic Planning Secretary Cayetano Paderanga said sans the accelerated spending programs, GDP growth this year would be lower at 4.2 to 5.2 percent. Abad said underspending was primarily due to the “realignments” of 785 projects included in this year’s national budget. He said that “some of the programs” included in the accelerated spending this year would extend next year. “Continuing the implementation of the projects next year will no longer impact on next year’s programmed deficit,” Abad said. –Virgilio Bugaoisan, Daily Tribune