MANILA, Philippines (UPDATE) - President Benigno Aquino on Wednesday unveiled a P72 billion stimulus package, which includes infrastructure, poverty alleviation and resettlement projects, to pump-prime the economy amid a global slowdown.
In a speech at the Foreign Correspondents Association of the Philippines (FOCAP) forum, Aquino said he authorized additional expenditures of more than P72 billion until the end of 2011.
"The global economy has undergone a bit of a slowdown recently and there is a question of how this might impact the economy... This slowdown is making some impact on the region, including the Philippines. I have authorized additional expenditures of more than P72 billion between now and the end of the year. This spending would provide added stimulus for our economy," he said.
This includes a P6.5 billion support fund for local government units (LGUs), which can be spent on infrastructure development and poverty alleviation programs.
Another P10 billion will be allocated for the resettlement of informal settlers, who are in danger zones.
Some P5.5 billion is for various infrastructure projects under the Department of Public Works and Highways (DPWH).
There will be P4.5 billion and P1.86 billion for the improvement of the MRT and LRT respectively.
"The criteria we used to choose these projects were simple, the funds will be spent on projects that will have high macro-economic impact and will help the poor," Aquino said.
There will be no new borrowings to fund these projects. The government will be using its savings and funds from its existing borrowing program.
Aquino said the global economic slowdown is a "formidable problem."
"We will do what we can within the bounds of economic prudence, and make sure the effects of this growth are felt more widely," he said.
The President said the stimulus package will be felt not only at the end of the year but also in the first half of next year.
"This P72B will have its own multiplier effect. It will pump-prime the economy to that extent," he added.
Aside from the stimulus program, Aquino said the government is strengthening its trade with China, BRICS and ASEAN countries to make up for the slowdown in the US and Europe.
While Aquino's speech did not provide much details, Budget Secretary Florencio Abad outlined the specific projects for the Disbursement Acceleration Plan for 2012.
"While there was a turnaround in our disbursement performance in August, it was not enough. That is why President Aquino instructed his government to execute these additional projects to bolster economic growth in 2011," Abad said.
Out of the P72.11 billion plan, P37.92 billion is for national government agencies; P7.25-billion to LGUs; and P26.90 billion to government-owned or -controlled corporations (GOCCs).
The DPWH will construct and rehabilitate P5.5 billion worth of roads, bridges, flood control and other projects. This includes infrastructure damaged by the two recent typhoons "Pedring" and "Quiel".
The Department of Agriculture will construct and rehabilitate P1.62 billion worth of irrigation, farm-to-market roads and other infrastructure. Additional funds are being released for the Mindanao Rural Development Project (P919 million) and the Agno River Integrated Irrigation Project (P411 million).
There will be P1.29 billion released for the Agrarian Reform Communities Project 2 of the Department of Agrarian Reform, and P625 million for the conduct of a National Survey of Farmers and Fisherfolk.
For the LGUs, the government will release a total of P6.5 billion in Internal Revenue Allotment (IRA). The funds will be used for the construction of arterial roads that connect to national roads; rural electrification for barangays and sitios; and projects that will benefit the poor.
Some P750 million is allotted as development assistance to Quezon province, as part of the settlement of National Power Corp. tax liabilities. Another P6.5 billion will be allocated for the various other programs and projects.
The government will disburse P11.05 billion to the National Housing Authority for projects such as on-site housing development for families living along dangerous areas (P10 billion) and housing for Bureau of Fire Protection and Bureau of Jail Management and Penology personnel (P500 million).
Another P400 million will be given to the Home Guarantee Corp. as equity infusion for its credit insurance and mortgage guaranty operations.
Some P1.5 billion will be provided to the National Health Insurance program, to support subsidies for indigents.
The Department of Health will also have an additional P249 million to hire nurses and midwives, who will be assigned in rural areas.
There will be P357 million for Philippine Heart Center's upgrade of facilities and equipment; P280 million for the Philippine Children’s Medical Center renovation and purchase of equipment; and P35 million for the pediatric pulmonary program of the Lung Center of the Philippines.