Philippine Government Set to Implement Another Round of Economic Stimulus Package

Aug 2020

The Philippine government is getting ready to rollout its second phase of stimulus package as the Bayanihan 2 is only awaiting the signature of President Rodrigo Duterte for enactment. The Bayanihan 2 aims to offer assistance, subsidies and socio-economic relief to mitigate the adverse impact and economic losses due to the pandemic.

Under the Bayanihan to Heal as One Act (Bayanihan 1) which had an even bigger budget of PHP 275 billion (USD 5.67 billion), the government had been continuing to release financial aid to affected businesses, displaced workers and purchase of testing kits and formation of medical facilities, among other measures.

Bayanihan 2 will see the release of another PHP 165.5 billion (USD 3.4 billion), with PHP 140 billion (USD 2.9 billion) as regular appropriations and PHP 25.5 billion (USD 526 million) as a stand-by fund, to provide subsidies to struggling sectors such as agriculture, tourism and manufacturing with a view to create jobs and social amelioration. The funds will be obtained from the 2020 national budget, savings, revenue collections, proceeds from loans and other foreign borrowings and funds from Government-owned and Controlled Corporations (GOCCs). Planned fund allocations include the following:

  • PHP 10 billion (USD 206 million) as subsidy to the National Health Insurance Program of PhilHealth to be used solely to cover Covid-19 expanded testing based on DOH Protocol and for allocation of Covid-19 confinements (inpatients)
  • PHP 10.5 billion (USD 216 million) to hire additional Health Care Workers and arrange for risk allowance, life insurance, compensation, and compensation for death and critical illness
    PHP 3 billion (USD 61.9 million) to buy face masks, personal protective equipment (PPE) sets for frontliners and indigents
  • PHP 4 billion (USD 82.5 million) to finance construction of temporary medical isolation and quarantine facilities, field hospitals, dormitories for frontliners, and expand government hospital capacity all over the country
  • PHP 20 billion (USD 412 million) for appropriate cash-for-work programs for displaced workers
  • PHP 51 billion (USD 1.1 billion) to infuse capital to government financial institutions
  • PHP 20 billion (USD 412 million) as direct cash or loan interest rate subsidies, under the programs of the Department of Agriculture- Agricultural Credit Policy Council (DA-ACPC)
  • PHP 10 billion (USD 206 million) to finance DOTr programs to assist the critically impacted businesses in the transportation industry
  • PHP 10 billion (USD 206 million) to finance the programs of the Tourism Infrastructure and Enterprise Zone Authority (Tieza) to help the tourism industry recover
  • Additional P100 million to finance the training and subsidies for tourist guides
  • PHP 3 billion (USD 61.9 million) to assist State Universities and Colleges (SUCs) in the development of smart campuses through investments in ICT infrastructure
  • PHP 600 million (USD 12.38 million) for subsidies and allowances to qualified students of public and private Tertiary Education Institutions
  • PHP 300 million (USD 6.19 million) for subsidies and allowances of affected teaching and non-teaching personnel, including part time faculty, in private and public Tertiary Education Institutions
  • PHP 12 billion (USD 247 million) to finance the Department of Social Welfare and Development (DSWD) programs
  • PHP 4 billion (USD 82.5 million) to assist the Department of Education in the implementation of Digital Education, Information Technology (IT) and Digital Infrastructures and Alternative Learning Modalities

Other salient features of the Bayanihan Act 2 include encouraging the country’s central bank, Bangko Sentral ng Pilipinas (BSP) and Securities and Exchange Commission (SEC) to relax regulatory and statutory restrictions and requirements for one year. It also plans for the creation of a national online electronic application system accessible to everyone in each local government unit (LGU) to provide contact tracing capacity. National permits, licenses, certificates for public and private projects that are nationally significant will be waived and priority lending provided for Micro Small and Medium Enterprises (MSMEs), Cooperatives, Hospitals, Tourism Industry, and OFWs through government financial institutions (GFIs). Loan term extensions or restructuring shall be enticed to regulatory relief and is exempt from Documentary Stamp Taxes.

The government is targeting to implement Bayanihan 2 in September and it will be in effect until December 31, 2020.

(Sources: Philippine Daily Inquirer; Business Mirror)

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