PH economic recovery rests on 2021 budget, 'set of measures' to aid businesses

ABS-CBN News

Posted at Sep 10 2020 11:06 AM

People flock along the rows of shops in Parañaque City on Aug. 23, 2020 amid the return of Metro Manila under general community quarantine. Mark Demayo, ABS-CBN News/File

MANILA - Economic recovery from the COVID-19 pandemic rests not just on the 2021 budget but also the swift passage of other measures meant to assist struggling businesses, Finance Asec. Tony Lambino said Thursday.

The P4.5-trillion 2021 national spending program needs to "go together" with the proposed bills meant to ease recovery for banks and businesses, Lambino told ANC.

The Financial Institutions’ Strategic Transfer (FIST) Bill, which will "enable banks to offload souring loans and assets, clean up their balance sheets, and extend more credit to more sectors in need," is critically important, he said.

Businesses are also asking for tax relief which can be addressed by the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill. This measure seeks to lower corporate income tax to 25 percent, Lambino said.

Meanwhile, the Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery (GUIDE) will help in terms of business insolvency, he said.

"We have to see these things as a set, the Bayanihan 1, Bayanihan 2, FIST bill, there’s also the GUIDE bill to help in terms of insolvency of companies, the CREATE bill...These things in combination will help our economy bounce back," Lambino said.

In the 2021 spending plan, the "lead initiative" of the government is its infrastructure program Build, Build, Build since it has the biggest multiplier effect in an economy, Lambino said.

Under the proposed bill, some P667.3 billion was allocated to the Department of Public Works and Highways, next to the Education department with P754.4 billion, he said.

"In terms of our recovery program, making sure that the whole country bounces back, the lead initiative is really the infrastructure program, the Build, Build, Build program because it has the largest multiplier effect in an economy and that is evidenced by numerous projects all over the country," Lambino said.

"We need to keep investing in those things because those will give us the largest returns in terms of the whole of society," he added.

The Department of Health is at the 5th spot with P203.1 billion proposed allocation. The Department of Interior and Local Government and the Department of National Defense are also within the top 5 agencies with the highest proposed allocation for next year.