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 or Bayanihan 2, the measure that grants special powers anew to President Duterte to best deal with the coronavirus pandemic that is not likely to go away soon.
The Senate ratified the consolidated version hammered out by a bicameral committee last Aug. 20, while the House of Representatives approved it last Aug. 24. This final congressional bill is now up for President Duterte’s approval into law.
“With the World Health Organization (WHO) itself saying this global health emergency is not likely to go away anytime soon, our fight against 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,” Finance Secretary Carlos Dominguez III said.
“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 (RA) 11469 or the Bayanihan to Heal as One Act,” Dominguez added.
The WHO recently assessed the efforts of the Philippines in strengthening its health capacity as highly effective in saving lives.
Dr. Rabindra Abeyasinghe, WHO representative to the Philippines, was recently quoted as saying that, “the fact that you have one of the lowest proportion of fatal cases in the region–also is an acknowledgement that you have expanded your clinical capacity, your hospital capacities. You have equipped your clinicians through proper training.”
Dominguez said that, “Continuous improvements are also crucial for bringing back the confidence of our people to operate in the new normal. If we can prevent the need for lockdowns and keep the virus at bay, the people can work, shop and move around more freely as long as we all comply with required health behaviors.”
“There are also measures to support blended learning, to ensure that the education of our children continues despite the pandemic,” he added.
The investments in health and education are investments in shoring up public confidence, the Finance chief said.
Under Bayanihan 2, “the infusion of capital in our GFIs, particularly Land Bank of the Philippines (LandBank) and Development Bank of the Philippines (DBP), 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 (MSMEs),” Dominguez explained.
“It’s only fair to the Filipino taxpayers that we leave the lending to the experts, the GFIs (government financial institutions). 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,” Dominguez said.
He also said that with Bayanihan 2 ratified, the 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); the 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.
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 Crisis, so they can extend credit to more sectors in need of financial aid.
Meanwhile, 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.
He said, “The Duterte administration will continue to work with the Congress on our economic priority bills. We seek to lower the corporate income tax rate through CREATE; mitigate the threat of non-performing assets to our banking system through FIST; and support, but subject to strict conditions, strategically important companies facing insolvency through GUIDE.”
“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.”
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