MANILA – Economic managers on Tuesday said the government’s budget gap may breach the 3.2 percent of gross domestic product (GDP) target this year to 3.6 percent due to spending related to coronavirus disease 2019 (Covid-19).
“Assuming that the Covid-19-induced disruptions last until after the middle of the year, the total revenue collection are expected to drop by around PHP91 billion,” Finance Secretary Carlos Dominguez III said in a briefing after the Economic Development Cluster (EDC) meeting at the Department of Finance (DOF).
Economic managers have set this year’s budget gap at PHP677.6 billion.
Dominguez said the EDC has recommended the approval of additional PHP2.92-billion funding for the Department of Health (DOH) to be used for more testing, augmentation of contact tracing and surveillance, and additional personnel protective equipment relative to Covid-19 cases.
He said the proposed funds augmentation will come from normal sources like borrowing, citing the drop in interest rates is favorable for the government’s borrowing program.
“As of now, we see the stimulus program as being just keeping our expenditure budget where it is despite the fact that our revenue is going down, so that in itself is already stimulus package,” he said.
Dominguez assured the public that the government has enough in its toolkit to ensure that expenditure remains at the level as planned despite economic growth and revenues might be hit due to the coronavirus.
“Our credit rating is quite robust and we don't expect any difficulty in covering a potential deficit that might occur because of the expected drop in economic activity because of this Covid,” he said.
Bangko Sentral ng Pilipinas (BSP) Deputy Governor Francisco Dakila Jr., during the same briefing, said growth of remittances is seen to take a 0.2-0.8 percentage point hit this year from the projected 3-percent expansion this year.
“This took into consideration the temporary ban on the deployment of workers in the affected countries -- China, Hong Kong and Macao. And also in Taiwan,” he said.
Dakila said China accounts for a small percentage of the 2019 total inflows of USD30.1 billion at only 0.1 percent.
“Again, our previous experiences have shown that remittances can be quite robust. There’s still shifting going on from one country to another in response to any shocks as in the past,” he added.
Meanwhile, Health Secretary Francisco Duque III said Filipinos need not worry about expenses related to Covid-19 because the Philippine Health Insurance Corporation (PhilHealth) has several packages that can be tapped for this.
He said a PHP14,000 worth of package has been established for isolation of Covid-19 patients, while those that will acquire severe pneumonia can avail of the PHP32,000 package. (PNA)
