The Department of Finance (DOF) has lauded the Senate and the House of Representatives for passing a “fiscally responsible” Bayanihan to Recover as One Act (Bayanihan 2), while it also seeks support on remaining economic recovery measures.
The Senate ratified the consolidated version hammered out by a bicameral committee last August 20, while the Lower House approved it last August 24. This final congressional bill is now up for President Duterte’s approval into law.
“With the World Health Organization itself saying this global health emergency is not likely to go away anytime soon, our fight against the coronavirus disease 2019 (COVID-19) is far from over and we need to keep our deficit within a manageable level in order to sustain a drawn-out battle with the pandemic,” Carlos Dominguez, DOF secretary, said in a statement yesterday.
“Bayanihan 2 will allow the Duterte administration to keep its health initiatives on front and center of the national COVID-19 response, with funding for contact tracing, streamlined systems for registering viral testing kits and testing centers, and various forms of support for our medical workers spelled out in this sequel to Republic Act 11469 or the Bayanihan to Heal as One Act,” Dominguez added.
Under Bayanihan 2, the finance chief said the infusion of capital in government financial institutions (GFIs), particularly Land Bank of the Philippines and Development Bank of the Philippines, will have large multiplier effects on the economy.
“These interventions are cost-effective for the taxpayer, with every peso generating around 10 times its value in credit, especially for our micro, small, and medium enterprises,” Dominguez said.
“It’s only fair to the Filipino taxpayers that we leave the lending to the experts, the GFIs. During these challenging times, we will need every bit of economic benefit we can get for every peso of taxpayer money. The GFIs have the expertise and experience to get it done,” he added.
Dominguez said with Bayanihan 2 ratified, congress can now move on to considering the other legislative proposals designed to achieve an early and strong recovery for the domestic economy battered by the pandemic.
These bills include the Corporate Recovery and Tax Incentives Act (CREATE), Financial Institutions’ Strategic Transfer (FIST) bill, and the Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery (GUIDE) bill.
The access-to-credit provisions of Bayanihan 2 will be amplified through the proposed GUIDE and FIST bills, the DOF said.
FIST will allow banks to dispose of non-performing loans and assets through asset management companies similar to special purpose vehicles created in the early 2000s in response to the Asian Financial Flu, the DOF said, so they can extend credit to more sectors in need of financial aid.
Meanwhile, the DOF said GUIDE will enable GFIs to form special holding companies that will infuse equity, but subject to strict conditions, into strategically important companies facing insolvency.
“President Duterte has made clear that he needs the timely passage of CREATE, FIST, and GUIDE as part of the government’s economic recovery plan. As Bayanihan 2 has already been resolved, we will continue to work with the senate and the house to get these imperatives passed in a fiscally responsible manner,” Dominguez said.
“As Bayanihan 2 is very close to being sent to the President for signature, we will keep working with the senate and the house to get these bills passed and complete our recovery package in response to the unprecedented COVID-19 crisis that has battered the global economy,” he added.