Senators weigh possible fund sources for proposed economic stimulus package

Several senators on Wednesday discussed the possible sources of funding for the proposed economic stimulus package to help various sectors in the Philippines recover from the impact of the COVID-19 pandemic.

Senate Minority Leader Franklin Drilon said that a supplemental budget cannot be funded by borrowings.

"It has never been done, to my recollection. The only sources [of supplemental budget] allowed are additional revenues, on top of programmed, and/or new sources of revenues," Drilon said in a message.

He cited Article 6, Section 25 (4) of the Constitution which states that supplemental appropriation "must be supported by funds actually available, as certified by the Treasury."

The senator explained that the underlying principle for this provision is fiscal responsibility.

He said that if special appropriation measures would be funded by borrowings, the deficit would only widen and the debt burden would increase.

"Without a supplemental budget, the stimulus package can be funded only through savings and  realignments of existing programs and projects under the 2019 and 2020 GAAs," Drilon said.

Senator Panfilo Lacson also stated the same requirement for a supplemental budget to be passed.

"We cannot squeeze blood from a turnip. No matter what amount Congress wants to push to stimulate the economy, without an accompanying revenue measure or a certification from the national treasurer that the money actually exists, a supplemental budget cannot be passed into law," Lacson said.

He, nonetheless, considered domestic and foreign loans as possible sources of funds for the government's economic recovery efforts.

"But even that takes time before the cash is made actually available. Pump priming of the economy by legislative initiative may only start once the money is available. That is a hard fact," Lacson said.

Last month,  Finance Secretary Carlos Dominguez III said the executive branch is constrained to ask for a supplemental budget to finance efforts against the coronavirus given the decline in government revenues.

"We are constrained in asking for additional supplemental budget because we do not have additional revenues. Our revenues have plummeted because of the lockdown and lack of economic activity our tax collections are really down," he said in a Senate hearing.
  
Presidential spokesperson Harry Roque on Tuesday reiterated the Finance chief's position that the proposed economic stimulus package must be fiscally sustainable.

"Sinisiguro lang po ng Department of Finance na any stimulus package that will become law can be funded from existing sources, or at least ma-identify kung saan manggagaling ang pondo," Roque said.

Last week, the House of Representatives approved on third and final reading the P1.3 trillion ARISE or Accelerated Recovery and Investments Stimulus for the Economy bill.

The National Economic and Development Authority said the lower chamber's proposal cannot be funded.

The Senate, on the other hand, is pushing for the Bayanihan to Recover as One Act which comes with a P140 billion appropriation. It was approved on second reading but was not touched further until the sine die adjournment because the Palace decided not to certify it as urgent.

Senate President Pro Tempore Ralph Recto, meanwhile, said the executive branch should still consider the Senate's proposal to give them a "stand-by authority" to spur economic relief.

"It gives them the authority to spend for better health infrastructure, protect jobs, provide relief to workers who lost their jobs and credit to businesses including micro, small, and medium enterprises," Recto said.

"It can be funded by increase in duties, which they have done for oil, new revenue source, borrowings, realignment and repurchase agreements with the central bank, etc.," he added.

On Monday, Malacañang said it is studying the possibility of calling for a special session of Congress in order to pass key COVID-19 response and recovery interventions that will be implemented in the coming months. —KG, GMA News