Philippine Pandemic Recovery Steps Await Duterte’s Approval
(Bloomberg) -- The Philippines has lined up key measures to support economic recovery for President Rodrigo Duterte’s approval, as it aims for a strong rebound in 2021 after plunging into recession this year amid the pandemic.
Congress has approved a record 4.5 trillion-peso ($93.6 billion) spending plan for 2021, and allowed unspent funds from this year’s budget and pandemic relief package to be rolled over to next year. A measure helping banks manage bad loans is also up for Duterte’s approval.
“All these form a coherent package that provides us with ample fiscal and financial support to help the economy recover,” Economic Planning Secretary Karl Chua said at a briefing Thursday.
The central bank has been calling for greater fiscal support to augment its efforts to boost the economy. The bank held its benchmark interest rate steady Thursday after cutting by 200 basis points earlier this year.
However, Chua said Wednesday that “no amount of stimulus or support will matter” if economic activity remains restricted, so reopening is being prioritized.
Here are details of the pandemic recovery measures:
- Next year’s budget, which Duterte is expected to sign before year-end, includes a 70 billion peso allocation for vaccines and 19 billion pesos to aid displaced workers, according to the House of Representatives. Infrastructure spending is at 1.1 trillion pesos, or 5.4% of gross domestic product
- Some 110 billion pesos in unused funds from this year’s budget can be tapped through 2021 under a bill approved by Congress, Senate finance committee chairman Sonny Angara said, according to a report in the Inquirer. A separate bill allows the use until end-June of 38 billion pesos in unused allocations from the second pandemic relief law, whose implementation was delayed
- Congress has approved a measure to boost bank lending by disposing of bad loans through asset-management companies. Banks can deploy 3 trillion pesos in additional loans as a result of the proposed law, which also exempts the sale of non-performing assets from some taxes
- The House and Senate are still reconciling versions of a bill cutting corporate income tax to 25%, from 30%
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