The chairman of the House Ways and Means committee on Monday said the proposed Bayanihan to Arise as One Act or Bayanihan 3 could be funded in a way that does not increase the country’s budget deficit.
Albay Rep. Joey Salceda said he is working with the Department of Finance to find revenue sources for the third Bayanihan measure and ensure that it would be “deficit-neutral.”
Salceda said the question of funding could be solved by increasing the mandatory dividend remittance of government-owned and controlled corporations (GOCCs) from 50 percent to 70 percent temporarily.
“This will require an amendment of RA (Republic Act) 7656 or the Dividends Law. This is probably worth P70 billion,” Salceda said.
He also proposed to allow the DOF to make capital withdrawals from “obese” GOCCs.
“There are GOCCs that have accumulated more retained earnings over the years than they can deploy, especially now. Authorizing a distribution in excess of dividends, in favor of the government, would allow us to mobilize sleeping money for Covid-19 (coronavirus disease 2019) response without hurting our overall fiscal standing,” he said.
He explained that the Bayanihan 3 will be principally composed of lifeline measures aimed at immediately alleviating poverty.
“We can’t do full-blown stimulus just yet because we have not yet maximized mobility. When the velocity of money is slow, it is unwise to infuse liquidity for growth. But we need to feed our people. So, actually, Bayanihan 3 will not be stimulus, but mainly lifeline,” Salceda said.
According to Salceda, the current draft of the technical working group (TWG) on Bayanihan 3 includes P108 billion for universal basic income of P1,000 per head, with another P108 billion in standby funds; P12 billion in direct funding for assistance for individuals in crisis situations (AICS) of the Department of Social Welfare and Development, and P3 billion for Medical Assistance for Indigent Patients (MAIP).
“Stimulus will be much more effective later, when we begin returning to normalcy. Our top priority now is to keep our people alive,” he said.
He said the DOF would soon endorse the passage of taxes on offsite cockpit betting operations or e-sabong, and Philippine Offshore Gaming Operations (POGO), which could also be sources of funding for the third Bayanihan measure.
He noted that the House of Representatives has already passed its versions of these reforms, while the Senate is likely to pass the bill on POGO taxes as soon as the session resumes, and will discuss the bill on e-sabong taxes soon.
“(Finance) Secretary (Carlos) Dominguez supports the POGO taxes. He is also inclined to endorsing the e-sabong tax, but wants a study on the matter. I have already asked the Committee secretariat to supply the necessary materials so his staff can run the numbers,” Salceda said.
