FINANCE Secretary Carlos G. Dominguez III said the government can only provide P173 billion in stimulus funds this year, as it is unsustainable to have the fiscal deficit exceed 9.3% of gross domestic product (GDP).
“If we are going to have another round of Bayanihan stimulus package this year, the economic team will work with Congress on looking for funding sources to ensure that it will not further widen our deficit,” Mr. Dominguez told reporters via Viber on Wednesday.
“It will be very unsustainable if we will have a fiscal deficit higher than what we estimated this year,” he said separately in a Senate hearing on Tuesday, as lawmakers consider a third stimulus package.
The economic team capped this year’s budget deficit at 9.3% of GDP.
Mr. Dominguez said they are “internally looking for the sources” to finance at least P173 billion of the proposed Bayanihan III. He said this package should be aimed at combating poverty and hunger, after the pandemic dealt a heavy blow on poor families.
Last year, the government allocated P275 billion for relief measures under Republic Act No. 11469 or the Bayanihan to Heal as One Act (Bayanihan I), followed by a second package worth P160 billion.
The House of Representatives passed House Bill 9411 or the Bayanihan to Arise as One Bill (Bayanihan III) which will provide more than P400 billion to help unemployed and hungry Filipinos amid a coronavirus pandemic.
Senator Juan Edgardo M. Angara on Wednesday said the Senate will tackle the third stimulus package when session resumes on July 26.
“Well the Bayanihan II expires at the end of this month. So siguro when Congress resumes, we can hear the different measures. It’s the right time to have hearings on Bayanihan III,” Mr. Angara, chair of the Senate Committee on Finance, said at the Kapihan sa Manila Bay. “So end of July, mag-hearing tayo diyan.”
Meanwhile, Mr. Dominguez said they will remain open to Bayanihan III if lawmakers can identify other potential revenue-generating measures.
However, he said the Department of Finance (DoF) is not proposing any tax hikes to boost revenues, but instead looked for savings from the 2020 budget and asked state-run firms to increase their dividend remittances to P47.17 billion this year.
As of end-May, government-owned and -controlled corporations remitted P31.38 billion to the National Government.
The government faces growing fiscal constraints as the coronavirus pandemic persists.
Under National Budget Memorandum No. 141 published on Wednesday, the Department of Budget and Management (DBM) said the fiscal space is projected to shrink to P329.8 billion next year, or equivalent to 6.6% of the proposed P5.024-trillion 2022 budget.
This is drastically lower than the average fiscal space worth P714.4 billion each year from 2017-2021. The DBM identifies these excess funds to fund new and expanded programs every year.
More than half of next year’s budget or P2.743 trillion will be earmarked to ongoing programs and projects while 38.8% or P1.951 trillion will be allotted for automatic appropriations, which includes allocations to local government units, the National Disaster Risk Reduction and Management Fund, and the Contingent Fund.
DBM Secretary Wendel E. Avisado asked line agencies to “focus on the more pressing priorities” in crafting their budget proposals because of the limited fiscal space next year.
The government released P653.4 billion for its pandemic response as of April 15, according to the DBM. — Beatrice M. Laforga with inputs from Vann Marlo M. Villegas