House Approves P1.3-Trillion Stimulus Bill on 3rd Reading
Source: Business World, June 4, 2020
THE House of Representatives on Thursday approved on third and final reading a P1.3-trillion stimulus package called the ARISE (Accelerated Recovery and Investments Stimulus for the Economy) bill, the new name for what had been known as the proposed Philippine Economic Stimulus Act (PESA).
The bill went through with 216 affirmative votes, seven negatives, and zero abstentions.
“After not earning revenues for two months, businesses’ funds are running dry. The next few months will be crucial — on top of managing financial obligations, businesses must now figure out how to innovate to thrive in the new normal. ARISE provides ways to equip businesses through interest-free loans and grants for education, training, and technical assistance,” Marikina Rep. and Co-chair of the Defeat COVID-19 committee’s economic stimulus cluster Stella Luz A. Quimbo said in a statement Wednesday.
A total of P708 billion will be allocated in 2020 for mass testing (P10 billion); wage subsidies (P110 billion), a cash-for-work program (P30 billion); assistance to students (P15 billion); loans to micro, small and medium enterprises or MSMEs (P50 billion); zero-interest loans to be extended by the Land Bank of the Philippines and Development Bank of the Philippines (P50 billion) and loan guarantees (P40 billion).
This year’s allocation also includes assistance to various sectors such as MSMEs (P10 billion); tourism (P58 billion); industry and services (P44 billion); transportation (P70 billion); agri-fisheries (P66 billion); and funding for the National Emergency Investment Vehicle (P25 billion) to “minimize permanent damage to the economy.”
For 2021, P80 billion will be allocated for further mass testing (P10 billion), loans for MSMEs (P25 billion), loan guarantees (P20 billion) and additional funding for the National Emergency Investment Vehicle (P25 billion).
Meanwhile, a P650-billion budget for the “Build, Build, Build” program will be spread over three years starting 2020 covering infrastructure projects supporting universal health care, education, and food security. About P130 billion is allocated for 2020.
The bill also sets Overseas Filipino Workers’ Philippine Health Insurance Corp. (Philhealth) premiums at P300 in 2020, P375 in 2021, and P450 in 2022.
It also suspends principal loan payments for one year to encourage business and consumer liquidity. Regulatory agencies are also directed to suspend, reduce or waive fees & charges for licensing, registration, permits and inspection, and may suspend filing and payment deadlines for one year.
The measure also directs the Department of Trade and Industry (DTI) to establish a Credit Mediation and Restructuring Service for re-availment, renewals and new loans, through Negosyo Centers or local government units.
The bill also condones loans of agrarian reform beneficiaries worth about P58.62 billion.
The bill encourages infrastructure agencies to explore private-public partnership (PPP) arrangements including joint ventures to speed up implementation, use private-sector capital to reduce current deficits, and create alternative sources of revenue for the government.
It also directs the National Economic and Development Authority (NEDA) to submit to Congress a long-term plan for building economic resilience within six months after the lifting of the various forms of quarantine. It also creates an Economic Stimulus Board (ESB) to identify the components of the fiscal stimulus package, and monitor the delivery of each intervention.
A joint Congressional oversight committee will be created to monitor the implementation of the stimulus package. The committee will consist of the co-chairpersons of the House economic stimulus cluster, and chairpersons of the Senate committees of Economic Affairs, Ways and Means and Finance.
The President is authorized to reallocate and realign the General Appropriations Acts of 2019 and 2020, and allocate cash, funds and investments held by any government-owned or -controlled corporations or any national government agency to provide funding support.
The Secretary of Finance is also authorized to direct the National Treasurer to borrow in the form of bonds and loans to fund the provisions of the bill.
“In total, the package is expected to protect and assist up to 15.7 million workers, create 3 million short-term jobs, and 1.5 million infrastructure jobs over three years, and help up to 5.57 million micro, small, and medium enterprises, both formal and non-formal. The GDP impact, based on our staff estimates, is immense: if implementation is rapid within the year, we may see our GDP grow slightly by 0.2% from the current expected decline of -2.8% in 2020,” Albay Rep. and Co-chair of the Defeat COVID-19 committee’s economic stimulus cluster Jose Maria Clemente S. Salceda said in a statement Monday.
Gabriela Party-List Rep. Arlene D. Brosas, who voted to reject the bill, said that the stimulus package is a “mere pain reliever” to the economic problems brought about by the pandemic.
“Mr. Speaker, artipisyal at panandalian lamang ang maaring idulot na ginhawa ng stimulus program na ito dahil hindi naman nito nilulutas ang mga batayang suliranin kaugnay ng food insecurity, pag-asa sa agricultural imports, pagsandig sa remittances, pagsasapribado ng serbisyong kalusugan, kawalan ng lokal na batayang industriya at regresibong pagbubuwis. Mahinang pain reliever lang ito kung tutuusin, (The benefits of this bill are artificial and temporary as it does not address problems like food insecurity, reliance on agricultural imports, dependence on remittances, the privatization of health care, the absence of domestic industry, and regressive taxation)“ she told the plenary Thursday.
Meanwhile, business organizations on Thursday expressed their support for the immediate passage of ARISE, saying that the measure will provide the “much-needed support and confidence” to COVID-19 frontliners, workers, and businesses.
“Unemployment funds and wage subsidies will help workers provide for their families, keep their children in school, and fuel the economy. Loans, grants, and guarantees will help businesses pay suppliers and banks, strengthening all of them for the challenging months and years ahead,” according to the joint statement of 44 groups.
They added that a “swift” and “substantial” intervention is needed, following the “lessons” that many countries have encountered during previous recessions.
“A law along the lines of ARISE would act on the lessons that many countries are heeding from previous recessions: that swift, substantial intervention is needed. The Administration’s fiscal management has provided the financial strength and fiscal space to do this. We can and should increase stimulus spending to approximate or exceed those of many of our neighbors,” the groups said.