Economic team awaits Palace cue on Bayanihan 3, growth targets stay

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Cash aid distribution in Navotas (FILE PHOTO)

Metro Manila (CNN Philippines, July 20) – Members of the economic team did not take up Congress' proposed stimulus package for pandemic response as it reviewed economic targets on Monday.

"The DBCC (Development Budget Coordination Committee) did not discuss the need for Bayanihan 3," Budget Secretary Wendel Avisado told CNN Philippines.

"We are focused on the preparation of the Fiscal Year 2022 proposed national budget and there is no directive from OP (Office of the President) re: Bayanihan 3," he added.

Avisado earlier said that the DBCC will tackle House Bill 9411 or the Bayanihan to Arise as One Act, together with the amount of savings realized by agencies from their respective 2020 regular budgets. "Whatever savings generated will be used for COVID 19 response," he added, noting that the savings tally is yet to be finalized later this week.

President Rodrigo Duterte ordered agencies in May to declare savings from last year's allotments to fund more pandemic response measures. The state has spent ₱665.72 billion on previous interventions.

Worth over ₱400 billion, the so-called Bayanihan 3 bill will give every Filipino ₱2,000 in aid if passed into law. Families and workers under lockdown will get up to ₱10,000 each.

The House of Representatives approved the measure in June, while the Senate will pick up discussions when it resumes sessions next week.

On Monday, Presidential Spokesperson Harry Roque said Malacañang first needs to check if funds are available before supporting the bill's passage.

READ: Realign 2021 budget to fund Bayanihan 3 - Drilon

With the fate of new aid uncertain, Philippine Chamber of Commerce and Industry (PCCI) president emeritus George Barcelon said authorities may have to make do with what they have and use unspent funds under Bayanihan 2 to provide additional support to struggling sectors.

Recovery seen intact

Even without big-ticket boosts or additional cash aid from Bayanihan 3, the DBCC said the local economy can bounce back to the pre-pandemic growth pace.

Economic managers on Monday kept the growth goal at 6-7% this year, following a 9.6% crash in 2020.

"The relaxation of quarantine restrictions in high-risk areas must be complemented with an accelerated vaccination roll-out, in order to allow more businesses to operate and consumers to participate in socioeconomic activities," the Cabinet officials said in a joint statement.

State revenues are seen to reach ₱2.88 trillion this year against ₱4.74 trillion in expenses, leaving a hefty budget gap of some ₱1.8 trillion, or 9.3% of the gross domestic product (GDP).

Export of goods will support the rebound, which the economic team said will likely grow by 10%, along with a 7% increase in service exports as travel and outsourcing sectors recover.

The recovery is seen fueled by additional infrastructure spending come 2022 at ₱1.29 trillion, when growth will surge to 7-9%. The infrastructure budget will remain above ₱1 trillion yearly until 2024 to support further growth ranging from 6-7%, the DBCC added.

However, the Asian Development Bank said this may not be doable.

In its Asian Development Outlook Supplement, growth was estimated at just 4.5% this year and 5.5% in 2022 -- both below government forecasts.

ADB said sustained state spending on infrastructure and social assistance programs has been "supporting" recovery together with the remittance-fueled pickup in household spending. However, it noted that private investment remained sluggish despite a gradual increase in factory output.

Delta variant threat

For now, the biggest concern of authorities would be how to prevent a COVID-19 surge due to the more virulent Delta coronavirus variant as more infections are reported in the country.

RELATED: DTI chief: Economic growth to start in Q2 if no surge in Delta variant

"The Delta variant is a risk that can be managed by adhering to strict health protocols so that its impact on the economy can be contained. Accelerating our vaccination program will help keep our growth targets," Socioeconomic Planning Secretary Karl Kendrick Chua also said.

The economic team noted that "intensified" implementation of the COVID-19 prevent, detect, isolate, treat, and recover strategy plus improved health system capacity would prevent community transmissions of the Delta variant.

PCCI's Barcelon echoed fears of spikes and lockdowns just when businesses are getting back on their feet.

"There seems to be a sense of more optimism, that's picking up. Just from the traffic alone, if that is a reflection of the bullishness in the economy, we can say that there's bit more upside," Barcelon said.

"Sa tingin ko mag-iingat ang gobyerno natin kasi tulad ng ibang mga bansa katulad ng Indonesia, sumipa ang infection nila [I think our government will turn cautious because like Indonesia, they saw a surge in cases]," he added. "It's a balancing between how we roll out the bakuna [vaccine], the mass inoculation, that can really make its impact felt."