NEWS

By Ben Rosario

Opposition Rep. Stella Quimbo warned on Saturday that government’s austerity measure may result in over a million job losses if it will include cuts of infrastructure projects necessary to create jobs and help the economy cushion the impact of the COVID-19 pandemic.

Marikina 2nd district Rep. Stella Luz A. Quimbo (Photo from PHCC / MANILA BULLETIN)

Quimbo said the Department of Budget and Management (DBM) must reconsider its decision to cut allocations for government programs that are not consistent with the bid to address the economic effects of the COVID-19 pandemic.

She supported Speaker Alan Cayetano’s declaration that funds for infrastructure projects under the 2020 national budget should be left untouched
“to provide the economy the stimulus it needs during and after the COVID-19 pandemic. “

“Given its multiplier effects, a conservative estimate would show that a P100 billion loss in the infrastructure budget would translate into a corresponding drop in GDP valued at P300 billion,” said Quimbo, the co-chair of the economic cluster of the Defeat COVID-19 Committee in the House of Representatives.

Quimbo said that if labor accounts for 37 percent of the P100 billion cut in infrastructure spending, then the loss in wages would amount to P111 billion.

“If workers are paid P500 per day for 22 days per month for a period of 6 months, then total wages would amount to P66,000 per worker. Hence, a loss of P111 billion in wages for every P100 billion cut in infrastructure spending would mean 1.68 million workers losing their jobs,” said Quimbo, a former professor and department chair of the School of Economics at the University of the Philippines.

Under National Budget Circular No. 580, the DBM said 35 percent of programmed appropriations under the 2020 national budget shall no longer be made available for release to government agencies starting April 1 this year.

The DBM also said at least 10 percent of the total released allotments to national government agencies for maintenance and other operating expenses (MOOE) and capital outlays that are not related to the COVID-19 response efforts shall no longer be available for obligation.

Cayetano has questioned the circular as this could mean a reduction in spending for President Duterte’s flagship Build, Build, Build program.

He said the provisions of Republic Act No. 11469 or the Bayanihan To Heal As One Act should be applied by the DBM to address the funding requirements to combat COVID-19.

Quimbo recalled that the head of the economic team, Finance Secretary Carlos Dominguez, has also underscored the need to sustain funding for infrastructure projects to help restart the economy and generate jobs and other livelihood opportunities once the COVID-19 pandemic is effectively contained.

The finance secretary, she said, had even committed to keep the budgetary allocations for the Build, Build, Build program intact in the recent hearing of the economic cluster of the Defeat COVID-19 Committee held online.

Dominguez pointed out in the virtual hearing that on top of realigning savings from the 2019 and 2020 national budgets as authorized by the Congress under the Bayanihan Law, the government can cover the funds needed to defeat COVID-19 and revitalize the economy once the crisis is over by borrowing from the domestic market and multilateral lenders such as the World Bank and Asian Development Bank.

Source: Manila Bulletin