Quimbo: Gov't may tap loans to fund Bayanihan 3 amid price hikes

Securing loans remains an option for the government in funding the proposed Bayanihan 3 measure, which aims to provide aid packages to the public amid rising oil prices, House ways and means panel chairman and Marikina 2nd District Rep. Miro Quimbo said.

“I don’t think we need to borrow money for Bayanihan 3, but again, it’s going to be the call of the Executive to identify what needs to be done,” Quimbo told reporters.

“This is a balancing act. Running the economy is like running a business. You cannot be content with whatever money you have available,” he added.

Quimbo, however, cited the role of borrowing in sustaining and growing the economy.

“Kung alam mo naman para mag-survive o para mas lumaki ang kita, kailangan mo rin umutang. Walang negosyo na hindi umutang,” he said.

(If you know that borrowing is necessary to survive or grow, then you also have to take out loans. No business or government avoids borrowing.)

“Wala ring gobyerno na hindi umutang. Kailangan ng pag-utang. (There is no government that does not borrow; borrowing is necessary.) What is important is that borrowing is managed well,” Quimbo added.

The Marikina lawmaker said borrowing should remain within government targets, including fiscal deficit limits, and should not exceed the country’s Gross Domestic Product (GDP).

The debt-to-GDP ratio refers to the government’s outstanding debt relative to the size of the economy over a given period. A lower ratio indicates a stronger capacity to manage and repay debt without adversely affecting the economy.

Not yet needed?

For Senator Sherwin Gatchalian, chairman of the Senate committee on finance, the proposed Bayanihan 3 is not yet a necessary measure as the government still has funds—as much as P200 billion—for subsidies, social amelioration, and other interventions. 

Nevertheless, he said the Senate is studying all possible courses of action, including passing Bayanihan 3.

“Kung sinara mo yung Red Sea, talagang wala nang pagdadaanan kahit anong langis galing ng Middle East. So, ‘yan ang worst case scenario natin. So, kailangan magplano tayo. And we need to already start,” he added.

(If the Red Sea is blocked, no supply from the Middle East will arrive. So, that's our worst case scenario. So, we need to plan. And we need to already start.) 

Should there be a tighter global oil supply, Gatchalian said that funding for Bayanihan 3 could reach P400 billion. 

At the height of the COVID-19 pandemic in 2020, the Philippines’ debt-to-GDP ratio rose to 60.5% in 2021, higher than the 54.6% recorded in 2020, due to increased borrowing to finance pandemic response, relief, and cash aid programs.

Prior to the pandemic, the country’s debt-to-GDP ratio reached a record low of 39.6% in 2019.

Quimbo said his committee has been informed by concerned government agencies that funds are available to support Bayanihan 3, although the exact amount has yet to be finalized.

He added that the measure will prioritize aid programs based on actual needs.

“We want to know what the agencies and sectors need. We cannot give aid that turns out to be something they don’t want or need,” Quimbo said.

“We need to gather information so we can come up with the right recommendations,” he added.

Quimbo earlier said Bayanihan 3 will prioritize assistance for the transport sector, which has been heavily affected by rising fuel prices.

He said the first committee hearing on the proposed measure is scheduled for April 8.—with Giselle Ombay/MCG/VBL, GMA News