Economic managers seek P130B additional fund for COVID-19 aid

Economic managers are pushing Congress to pass a measure which will provide a P130-billion suplemental fund to the Bayanihan To Heal As One Act to be used for additional subsidies and assistance to sectors impacted by COVID-19.

In a virtual briefing on Thursday, Acting Socioeconomic Planning Secretary Karl Kendrick Chua said the measure, which he tentatively called Bayanihan II, aims to provide spending and capital support, and to restore the income and jobs of consumers.

For the demand side, Chua said the measure will stimulate private consumption through boosting the health system capacity and infrastructure, restoring the food value chain, and restarting crucial infrastructure projects.

"Assuming we can recover in the demand side and give back confidence to people and their purchasing power is restored, then we are in a position to help the firms and we will do this by using the financial sector to provide liquidity to prevent insolvency," he said.

"We don't want a case wherein the illiquid firms eventually become insolvent -- meaning they don't have enough assets to pay their liabilities," Chua added.

The proposed Bayanihan II includes the following allocations: P30 billion in emergency subsidies for 9 million families in the informal sector; P21 billion in wage subsidies for 26 million workers; P10 billion for health and testing.

It also includes P35 billion additional capital for the Land Bank of the Philippines; and P15 billion for the Development Bank of the Philippines.

"We will ask microfinance, the coop banks, the rural banks, and thrift banks to continue to lend them and we will use our government banks to act as wholesalers to buy some of their loans so they can be freed up of more capital to lend and help enterprises," explained Chua.

Aside from this, Bayanihan II will infuse P20 billion in the capital of the Philippine Guarantee Corp. (PhilGuarantee), which houses the merged Home Guarantee Corporation (HGC), Philippine Export-Import Credit Agency (PHILEXIM), Small Business Corp., the Agricultural Guarantee Fund Pool, and the Industrial Guarantee and Loan Fund (IGFL).

"We also look at investment in PhilGuarantee because PhilGuarantee, it provides an important service. It can guarantee loans given by non-government banks," Finance Secretary Carlos Dominguez III said.

"Every peso of capital in PhilGuarantee can generate probably 15 or 20 worth of guarantees. By putting P70 billion into these companies, we will probably be generating at least close to a trillion pesos of economic activity and loans for these two investments," he elaborated.

Duterte in March signed into law the Bayanihan to heal as One Act, allowing him to exercise additional powers to curb the spread of the COVID-19.

The government has so far allocated a P1.4-trillion war chest for efforts against COVID-19. —LDF, GMA News