Executive grilled on COVID-19 response fund

President Rodrigo Duterte’s economic managers faced intense questioning from several lawmakers on the disbursement of billions of pesos in COVID-19 response fund at the start of the deliberations of the proposed budget for 2021.

Albay Representative Edcel Lagman said the government appears to have resources for a more “adequate Bayanihan 2” or the Bayanihan to Recover as One Act, which has been appropriated a budget of P165.5 billion.  The bill is awaiting Duterte’s signature.

Lagman pointed out the lack of clarity on how the multi-billion funds to address the impact of the pandemic are being disbursed, including the foreign loans and grants, which have reached $8.83 billion as of August.

Department of Finance (DOF) Secretary Carlos Dominguez III said the foreign borrowings are all for COVID-19 response.

“Sec. Dominguez said that the disbursement from the foreign borrowings were for COVID-19 response, but the report of (Department of Budget and Management (DBM) Secretary (Wendel) Avisado belied the claim of Dominguez because foreign borrowings were not listed as one of the sources of pandemic response expenditures per DBM report as of August,” Lagman said in a text response to GMA News Online.

“The fact is we have foreign and domestic borrowings to support a bigger and more adequate Bayanihan 2,” he added.

Earlier in the budget briefing, Avisado said the government has released a total of P376.57 billion in funds to key agencies for their coronavirus disease response efforts. 

Among the sources of the funds were discontinued programs/activities/projects in 2018 and 2019 (66.5 billion); regular agency projects (P9.8 billion); and Special Purpose Funds (P102 billion).

“The fact is all of the P376.6 billion for COVID-19 released by the DBM did not include as a source foreign borrowings.  DBM should know what it is releasing and from what sources it has released,” Lagman said.

Dominguez explained that all funds coming in for  COVID-19 response are pooled in one account and released by the DBM according to budget items.

“We don’t know exactly where those peso went and I don’t think the DBM knows which peso came from where,” Dominguez said.

Lagman, former House appropriations committee chairman, said: It should be between Secretary Dominguez and Secretary Avisado to check the differences in their perspective with respect to the disbursement of funds.”

In his remarks during the House briefing, Dominguez said the Philippines has raised a total of $8.83 billion in foreign budgetary support financing, project loans, and grants for the government’s response and recovery efforts amid the COVID-19 pandemic.

Data from the DOF’s website showed that $6.26 billion of the COVID-19 financing secured has been disbursed to the government, meaning it is already in the Treasury.

Marikina Representative Stella Luz Quimbo earlier asked the Finance chief what the government’s projected cash position would be by the end of 2021.

In response, Dominguez said, “We do not disclose our cash position.”

“The reason is we are in the debt market and we do not wish to harm our negotiating position,” he added.

Lagman countered that the DOF “cannot hide the true status of the foreign and domestic borrowings on the pretense that he is barred from disclosing the the country’s cash balances because it will prejudice our negotiation for loans as its creditors will not also ask the same relevant question.”

On Lagman’s questioning, Bangko Sentral ng Pilipinas Governor Benjamin Diokno said the central bank can lend an additional P200 billion in budgetary support for the implementation of Bayanihan 2 when it becomes a law.

Avisado said the biggest allocation under the bill will be for planned capital infusion into government financial institutions like the Development Bank of the Philippines and Land Bank of the Philippines to save distressed businesses.—LDF, GMA News