Finance chief says PH economy to remain strong amid nCoV threat, other challenges
Robie de Guzman • February 6, 2020 • 507
MANILA, Philippines – The Department of Finance (DOF) has expressed confidence that the challenges posed by the global spread of the novel coronavirus (2019-nCoV), the eruption of Taal Volcano and the cases of African Swine Fever (ASF) are not enough to drag the country’s economic growth below the government’s target.
In a joint hearing conducted by the Senate committees on health and finance on Tuesday, Finance Secretary Carlos Dominguez III said the administration’s economic teams stands by its target of attaining a gross domestic product (GDP) growth rate of 6.5 % to 7.5% this year even amid the headwinds from 2019-nCoV and other challenges.
“At this moment, it is reasonable to expect that while these developments might slightly restrain our economic expansion, these threats are not enough to force a dramatic reduction in our growth estimates,” Dominguez said.
While the hearing was called to study ways of mitigating the impact of the nCoV outbreak on the economy, Dominguez said this development should be assessed together with the effects of the recent Taal Volcano eruption and the ASF outbreak to determine whether these require revisiting economic growth targets this year.
“While these developments may dampen our growth somewhat, domestic tourism is expected to increase as more people would likely prefer to travel within our borders, thus boosting domestic consumption,” he said.
“With our ‘Build, Build Build’ program firing on all cylinders this year, complemented by a benign inflation rate and a stable monetary policy, we expect the economy at large to sustain its momentum,” he added.
The Finance chief also stated that with the nCoV outbreak still on its early stages, it would be difficult for the economic team to estimate its potential economic costs at this time.
“We are consoled by the observation that the virus has limited local transmissions outside China,” he said.
“A significant impact on the economy will most likely be centered in the tourism sector. The travel and tourism industries around the globe are taking a hit as a result of the various levels of travel bans imposed by national governments and of voluntary decisions of airlines to cut flights to and from China,” he added.
Dominguez also said that the country may also suffer a short-term slight decline in exports, particularly in the sale of electronics and auto parts, due to a possible disruption in the global supply chain as a result of the temporary factory closures in China, which is the country’s top trading partner.
“Incidentally, our top imports from China such as steel, machinery and petroleum are products that do not seem to carry the nCoV virus, though we will continue to take all necessary precautions,” he said.
To address the possible temporary decline in the exports of electronics and auto parts, the Department of Trade and Industry (DTI) has committed to work closely with affected Chinese and China-based companies, which will be looking to strengthen their operations by adding a production site outside of China, Dominguez said.
Dominguez added that what happened during the previous outbreaks of the Severe Acute Respiratory Syndrome (SARS), H1N1, and the Middle East Respiratory Syndrome (MERSCoV) might give authorities a glimpse of how the nCoV could impact the economy.
As for the ASF outbreak, Dominguez noted that the government has been successful in intercepting contaminated pork imported from other countries through the Bureau of Customs’ anti-smuggling campaign and the Bureau of Animal Industry’s meat inspection efforts.
The Department of Agriculture (DA) has also been strictly enforcing biosecurity measures and setting up more quarantine checkpoints, as well as providing more disinfection facilities to manage, contain, and control the spread of the ASF, he said.
As for the impact of the latest Taal Volcano eruption, the Finance chief said that an explosive eruption could still happen, and “unless and until this actually happens, we can only speculate on the full impact of this episode on the economy.”
As of January 20, estimates from the National Economic and Development Authority (NEDA) show that the total foregone income in the economic sectors owing to the eruption could reach P6.66 billion pesos or 0.26 percent of the 2018 gross regional domestic product of the CALABARZON (Cavite, Laguna, Batangas, Rizal and Quezon) corridor.
“The bulk of the foregone income comes from agriculture and fisheries sector, services, and industry,” Dominguez said. “Short of a major eruption, the damage to our crops and the challenges of dislocated communities to which the government will continue to respond, will not significantly impact our overall growth projections.”
He said the DA and the concerned local government units are expediting the release of production support, agri-fishery aid and livelihood assistance, and cash or zero-interest loan assistance programs to the affected farmers and fisherfolk, as well as the implementation of the recovery and rehabilitation plans for the affected areas.
A 13-year-old boy in London who tested positive for coronavirus has died, a hospital said on Tuesday (March 31).
“Sadly, a 13-year old boy who tested positive for COVID-19 has passed away, and our thoughts and condolences are with the family at this time,” King’s College Hospital said in a statement.
“The death has been referred to the coroner and no further comment will be made.”
The number of deaths from coronavirus in the United Kingdom rose by 27% as the UK government said 1,789 people have died in hospitals as of 1600 GMT on Monday, an increase of 381 from Sunday, the largest rise in absolute terms yet. (Reuters)
MANILA, Philippines – The Department of Finance (DOF) on Wednesday, April 1 issued the implementing rules and regulations (IRR) for the mandated 30-day grace period for the payment of all loans falling due within the enhanced community quarantine (ECQ) in Luzon.
Finance Secretary Carlos Dominguez III signed the IRR which serves as the guidelines for the implementation of Section 4(aa) of Republic Act No. 11469 or the Bayanihan to Heal as One Law.
Dominguez said this provision covers banks, quasi-banks, non-stock savings and loan associations, credit card issuers and pawnshops, other credit granting financial institutions under the Bangko Sentral ng Pilipinas, Securities and Exchange Commission and Cooperative Development Authority, both public and private including the Government Service Insurance System, Social Security System, and Pag-IBIG Fund.
Under the Bayanihan law, these institutions are mandated to “implement a 30-day grace period for all loans with principal and/or interest falling due within the ECQ Period without incurring interest on interest, penalties, fees and other charges.”
All lenders are likewise prohibited from requiring their clients to waive the application of the measure’s provisions.
“No waiver previously executed by borrowers covering payments falling due during the ECQ Period shall be valid. Nonetheless, the grant of grace period by the above-mentioned Covered Institutions shall not preclude the borrowers from paying their obligations as they fall due during the period of ECQ should they so desire,” the IRR added.
The mandatory extension also applies to each of the multiple loans of borrowers with the principal and/or interest falling due within the quarantine period.
Under Section 5.01 of the IRR, borrowers whose loans fall due within the said period are spared from paying an additional documentary stamp tax (DST) as a consequence of the relief granted. Also, no DST shall be imposed on “credit extensions and credit restructuring, micro-lending including those obtained from pawnshops and extensions thereof during the ECQ period.”
The Luzon enhanced community quarantine covers the period from March 17 to April 12, based on the Proclamation No. 929 issued by President Rodrigo Duterte last March 16.
The initial 30-day grace period shall automatically be extended if the ECQ period is extended by the president pursuant to his emergency powers under the Bayanihan law, the IRR also stated.
“All covered Institutions shall not charge or apply interest on interest, fees, and charges during the 30-day grace period to future payments/amortizations of the individuals, households, micro, small and medium enterprises (MSMEs) and corporate borrowers,” the rules said.
As for the accrued interest for the 30-day grace period, this may be paid by the borrower on a staggered basis over the remaining life of the loan.
“Nonetheless, this shall not preclude the borrower from paying the accrued interest in full on the new date following the application of the 30-day grace period or extended grace period, as the case may be,” the IRR stated.
Violators of the IRR provisions shall be subject to the appropriate penalties under RA 11469, as well as existing laws, rules, and regulations, the DOF said.
The department said the implementing rules shall take effect immediately upon publication.
MANILA, Philippines – The Department of Finance (DOF) on Tuesday detailed the government’s plan to provide emergency subsidies worth P200 billion to some 18 million low-income households who lost their sources of income due to the novel coronavirus disease (COVID-19) crisis.
In a statement, Finance Secretary Carlos Dominguez III said the P200 billion program for distribution in cash, and basic needs over the next two months is the largest direct financial aid package ever granted by the government to Filipino families in the country’s history.
Dominguez said this is in line with the directive of President Rodrigo Duterte to give priority to providing a lifeline to Filipino households heavily affected by the COVID-19 pandemic.
“We need to take care of our people first because that is the primordial duty of the government and society, especially during crises such as this pandemic that has claimed the lives of over 30,000 worldwide and battered the global economy,” he said.
The fund for the subsidy program is sourced from the accounts of various government-owned and -controlled corporations (GOCC), and national government realigned to combat the coronavirus crisis.
The Republic Act 11469 or the Bayanihan to Heal as One Act, enacted on March 24, authorizes President Rodrigo Duterte to realign or reallocate savings generated from GOCCs, the 2020 national budget and extended 2019 budget to bankroll the emergency subsidy program.
Under the subsidy program, how much will each vulnerable household get from the government?
The DOF said that under the ‘Bayanihan’ law, the government will give P5,000 to P8,000 each month for two months. This is computed based on the minimum daily wage rates in their respective regions.
Who are the program’s beneficiaries?
The Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF-EID) on Tuesday released a list of target beneficiaries who could avail of the program:
The target beneficiaries are families who may have at least one member belonging to any of the following vulnerable or disadvantaged sectors:
Persons with Disability
Pregnant and Lactating Women
Distressed overseas Filipinos (referring to those who were repatriated or banned from traveling outside the Philippines on account of COVID-19 breakout, from January 2020 until the lifting of the community quarantine)
Members of poor indigenous communities
Informal economy workers (such as directly hired workers, subcontracted workers, homeworkers, house helpers, public utility drivers, micro-entrepreneurs with an asset of less than P100,000, street vendors)
Sub-minimum wage earners (such as dishwashers or helpers in carinderia or eateries)
Farmers, fisherfolks and farm workers
Employees affected by ‘no work, no pay’ policy
Workers not covered by DOLE adjustment measures program
Stranded workers who cannot return to their permanent homes at the moment
The DOF said that of these beneficiaries, 4.3 million families are recipients of the P2,150 average monthly subsidy from the Conditional Cash Transfer (CCT) component of the Department of Social Welfare and Development (DSWD)’s Pantawid Pamilyang Pilipino Program (4Ps) program.
“For those who are already receiving grants from various national and local programs, the government will provide them with a top-up or additional support to meet the P5,000 to P8,000 subsidy amount,” Dominguez said.
The DOF estimates that around P97.4 billion is needed per month to finance the subsidy, or almost P200 billion for two months, plus administrative costs totaling P5.1 billion.
“We will urgently deliver this emergency subsidy to millions of our fellow Filipinos who live day-to-day on subsistence earnings or ‘no-work, no-pay’ arrangements,” Dominguez said.
How will these subsidies be delivered to beneficiaries?
The DOF said the subsidies will be delivered through various national and local programs in the form of food, cash, and other essentials for the next two months, as provided in the ‘Bayanihan’ Law.
Is there an economic relief for affected businesses?
The DOF said they will eventually put in place programs for affected businesses “so the economy could bounce back as soon as we beat this lethal virus.”
“For the moment, the government must attend to dislocated families and keep Filipino workers healthy so they are ready for the subsequent resurgence in economic activity,” Dominguez said.
The Finance chief also appealed to private-sector employers to do their part in protecting the welfare of some 6.6 million Filipino families dependent on their businesses and who belong to the formal economy.
“We urge business leaders and enterprise owners to support their workers who may have savings, but might need additional assistance during this difficult time,” he said.
He also appealed to taxpayers who are still able to file and pay their taxes early to do so despite the one-month extension implemented under the ‘Bayanihan’ law in order to “fund these programs with the latest amount of borrowing.”
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