President Duterte’s chief economic manager said that additional stimulus spending for this year, if there would be any, will not be funded by borrowings.
Citing “the President’s policy of prudent fiscal management,” Finance Secretary Carlos G. Dominguez III said the executive department would work with Congress in ensuring that the government’s budget deficit ceiling is kept for 2021.
Dominguez said the government should find revenue sources if there will be a third Bayanihan measure this year.
“The economic team will work with Congress on looking for funding sources to ensure that it will not further widen our deficit,” Dominguez told reporters in a mobile phone message on Wednesday, June 16.
The House of Representatives approved on third and final reading its proposed “Bayanihan to Arise as One Act” last June 1. The measure seeks to appropriate P401 billion as an additional COVID-19 stimulus and response fund.
However, the proposed measure failed to secure a Certificate of Availability of Funds (CAF)—a requirement for special appropriations bills on Section 25 of the 1987 Constitution—from the Bureau of the Treasury.
Dominguez said the Duterte administration is determined to keep its budget deficit cap at a record P1.86 trillion this year, which is already about 36 percent higher than in 2020 and equivalent to 9.3 percent of gross domestic product (GDP).
“Our goal, in keeping with the President’s policy of prudent fiscal management, is to keep our budget deficit within a manageable level. Hence, we want any additional expenditure to be deficit neutral,” Dominguez said.
He said the Department of Finance (DOF) has not proposed any tax hikes to generate additional revenues. However, President Duterte raised the dividend remittance of government owned and controlled corporations (GOCCs).
As of end-May 2021, collections from GOCC dividend remittances have already reached P31.38 billion. “We target to collect P47.17 billion in remittances for this year,” Dominguez said.
In addition, the President has issued Administrative Order No. 41 directing all agencies to identify savings from their respective appropriations under the 2020 national budget
“These steps will ensure that any additional stimulus package would be adequately funded and backed up by available financial resources,” Dominguez said.