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Why is bulk of P27.1-B ‘war chest’ allocated for tourism? DOF’s Dominguez explains

Finance Secretary Carlos Dominguez III on Tuesday explained why the lion’s share or P14 billion of the P27.1-billion spending plan to combat the coronavirus disease 2019 (COVID-19) and provide economic relief to affected industries has been earmarked for the tourism sector.

Under the Duterte administration’s economic team’s “war chest,” various programs of the Department of Tourism (DOT) will be given P14 billion to support the tourism industry.  The funds will be sourced from the Tourism Infrastructure and Enterprise Zone Authority (TIEZA). 

Meanwhile, an additional P3.1 billion will be mobilized to contribute directly to efforts to stop the spread of COVID-19, including the acquisition of test kits. The funds came from the Philippine Amusement and Gaming Corp. (Pagcor), Philippine Charity Sweepstakes Office (PCSO) and the Asian Development Bank (ADB).

Asked why bulk of the government’s package is allotted for tourism, Dominguez told GMA News Online “because as of now, the tourism sector is the most affected.”

The National Economic and Development Authority (NEDA) has estimated that tourist arrivals in the country will be slashed by 1.4 million with foregone gross valued added of P93 to P187 billion. 

Further, about 30,000 to 50,000 jobs may be lost amid the COVID-19 threat. The disease’s threat is also seen to shave off as much as one percentage point in the country’s economic output. 

For his part, Budget Secretary Wendel Avisado said the allotments presented by the economic team are “tentative allocations.”

“We will shift the funds where it is more needed, whenever required and/or necessary,” Avisado told GMA News Online.

“What we are simply saying is that funds are available when needed,” the Budget chief said.

The fiscal support package crafted by the economic team also include the following:

  • P2 billion representing the initial budget set aside by the Department of Labor and Employment (DOLE) for social protection programs for vulnerable workers, to be used for wage subsidy/financial support to COVID affected establishments and workers;
  • Mobilization of an existing P1.2 billion in the Social Security System (SSS) to cover unemployment benefits for dislocated workers
  • The Technical Education and Skills Development Authority (TESDA)'s Scholarship Programs amounting to P3 billion will support affected and temporarily displaced workers through upskilling and reskilling. It is also offering free courses for all who would like to acquire new skills in the convenience of their own homes, mobile phones and computers through the TESDA Online Program;
  • P2.8 billion for the Survival and Recovery (SURE) Aid Program of the Department of Agriculture-Agricultural Credit Policy Council (DA-ACPC), which provides loans of up to P25,000 each at zero interest for smallholder farmers and fisherfolk affected by calamity and disasters. This initiative includes a one-year moratorium without interest on payments of outstanding loan obligations of small farmers and fisherfolk (SFF) borrowers under the ACPC Credit Program amounting to P2.03 billion;
  • P1 billion allotted by the Department of Trade and Industry (DTI) for its Pondo sa Pagbabago at Pag-Asenso (P3) Microfinancing special loan package of the Small Business Corp. (SBC) for affected micro entrepreneurs/micro, small and medium enterprises (MSMEs).  Also included is the DTI’s ongoing assistance in finding new supply sources and non-traditional markets for industries affected by supply chain disruptions and the conduct of trade and investment missions to support the continued operation of industry;

Additional support mechanisms identified by the Economic Development Cluster are as follows:

  • A loan program of the Government Service Insurance System (GSIS) intended for affected government employees and retirees;
  • Mobilization of funds from government-owned or -controlled corporations (GOCCs) to assist airlines and the rest of the tourism industry;
  • Programs of the largest government banks to help address the impact of the health emergency, such as the Development Bank of the Philippines (DBP)'s Rehabilitation Support Program on Severe Events (RESPONSE), which provides public and private institutions in areas declared under a state of calamity with low-interest loans under a simplified application procedure; and the Land Bank of the Philippines (LANDBANK)' offer of restructured loan amortizations by giving longer tenor and grace periods, with the option of a fixed interest rate under the LANDBANK Calamity Rehabilitation Support (LBP CARES); and
  • The grant of temporary and rediscounting relief measures for financial institutions, as approved by the Monetary Board (MB). Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno earlier said that, “the MB is ready to deploy any or all its policy tools, as appropriate, to address all challenges to our own financial markets and growth prospects.”

— RSJ, GMA News