No need for another stimulus package – DBM

MANILA, Philippines – The Department of Budget and Management (DBM) said yesterday there is no need for another stimulus package at this time to spur economic growth given the available budget for various projects to be released immediately.

In a press conference in Malacanang, Budget Secretary Florencio Abad said that the President and his economic team would be discussing possible additional measures that the government could take as a response to the developments in Europe and the US.

“There’s going to be an economic managers’ meeting this week. And one of them is really to look into the direction of the sovereign debt crisis in Europe, as well as the fiscal crisis in the US and possibly to what the extent the recovery has happened in the supply chain in Japan,” Abad said when asked about the government action on the global economic situation.

The Philippines will also consider opportunities available in Asia, Abad said.

“In the emerging markets, there seems to be more activity that’s going on that creates potentials for investments and trade. So that’s really the general area that we will cover in the meeting.”

Among the emerging markets in the Asian region are India and Indonesia, he said.

Abad, however expressed belief that the biggest opportunity would be the domestic expansion of both public and private consumption given the slack that needs to be filled.

“So we will be focused more on the increased domestic consumption, but without overlooking the opportunities outside,” he said.

Abad said the P72-billion stimulus package announced by the President last year was already 100 percent released.

“It has already been almost like 95 percent obligated and easily about 85 percent disbursed, so that will impact on our spending in the year. The additional P13.4 billion was also almost a 100 percent released and to a significant degree about 85 percent was already obligated and disbursed. But the implementation of these projects will continue on for the new year.

He said there was an additional P13.4 billion released, not by way of a stimulus, but projects that were proposed as a result of the calamities that were experienced, including the satellite mapping project amounting to P1.6-billion.

This was proposed by the Department of Science and Technology (DOST) and the Philippine Atmospheric Geophysical and Astronomical Services Administration (Pagasa) to allow the government to map the geo-hazard areas in about 24 provinces.

“So those were as a result of those initiatives that were proposed towards the end of the year where we had a better picture of the government’s savings and appropriations that were truly not going to be issued,” Abad said.

Abad said they were confident that the country could meet its growth targets for the year by inducing public consumption.

“Because we expect that consumption externally induced will not be so much because of the continuing uncertainty in Europe and the US. We have to be able to really jumpstart internal consumption especially from the public end by the measures that we have already put in place and are now implementing,” he said.

Abad said the last quarter saw a dramatic turnaround of government spending especially the months of November and December.

“For the first time in November, our actual expenditures surpassed the program expenditures and we hope that we will see that even more in December,” he said.

“For sure, we’re not going to have the problems we had last year where we had weak spending. So this year because of the aggressive measures that we adopted, certainly we are going to be able to stay close or within the program spending for the year. And if the carryover projects plus the implementation of PPP (Public-Private Partnership) projects that are going to be tendered in the first quarter all come through, then really the spending level is going to be much, much higher than it was last year,” he said.

Abad assured thought that government would stay with the P286 billion ceiling.

“We are going to watch out for that. We have enough room to maneuver insofar as calibrating both the spending as well as the management of our cash resources. So we will answer that question after the quarter because what we’d like to see now is to stay within the schedule of our program expenditures,” he said.

To further strengthen the country’s economic foundations, Abad said the Aquino administration allocated P438.8 billion of the 2012 national budget to usher rapid, inclusive and sustainable economic growth.

Abad said the P438.8 billion economic sector budget comprised 24.2 percent of the P1.816 trillion budget for this year. –Aurea Calica (The Philippine Star)