Tuesday, 5 January 2010

2010 stimulus between P100B & P330B

B. V. Buco, Jr.

THE GOVERNMENT plans to identify at least P100 billion from the 2010 budget and other sources to be used for continued stimulus funding this year, the country’s economic planning chief said yesterday.

Specifically, Acting National Economic Development Authority (NEDA) Director General Augusto B. Santos told reporters yesterday that the government plans to set aside "more than P100 billion but less than P330 billion" in stimulus spending this year.

"World Bank Chief Economist Justin Li says governments should continue stimulus spending until 2012-2013...We do not want to remove stimulus [this year] but will continue it [although] at a reduced rate. It will be less than P330 billion but more than P100 billion," he said.

Mr. Santos said that part of this year’s fiscal stimulus, this time called the Reloading Economic Acceleration Plan (REAP), will be the planned P100-billion private-public sector infrastructure fund for 2009 that failed to materialize due to these sectors’ failure to agree on projects to be funded.

"It’s [P100-billion public-private sector fund] not totally scrapped," Mr. Santos said. "The president authorized fund raising by the National Development Co. (NDC) by selling bonds to the tune of P50 billion which will be used for that."

President Gloria Macapagal-Arroyo in August last year signed EO 824, authorizing NDC to issue P50 billion worth of "infrastructure bonds." It was eventually decided, however, that proceeds from the bond issue, which was originally earmarked for new infrastructure, will be used to fund rebuilding of public structures damaged or destroyed by storms and Ondoy and Pepeng in the last quarter of 2009.

"Basically, REAP is already part of [the proposed P1.54-trillion] 2010 national budget. As soon as the President signs it, the NPPS (National Planning and Policy Staff) can calculate the [exact] amount of [this year’s] fiscal stimulus," Mr. Santos added.

As regards last year’s fiscal stimulus, how much was actually spent on infrastructure has yet to be determined as various implementing agencies have yet to submit reports to the Department of Budget and Management (DBM), the NEDA chief said. "There’s lag time of two months from December 31. We still need to get the report from the DBM."

University of the Philippines economist Benjamin E. Diokno said via e-mail yesterday that "the real fiscal stimulus program last year was not P330 billion. It included items that are not real stimulus -- for example, the private-public partnership fund of about P100 billion. From the latter, very little was actually released."

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