THE national government’s savings account is kept at “healthy levels” even though the revenue channels are being blocked by pandemic-induced bottlenecks, an economist said.
ING Bank Manila Economist Nicholas Antonio T. Mapa noted on Tuesday that the government has set aside P824 billion at the Bangko Sentral ng Pilipinas (BSP) as it puts up a Covid-19 war chest.
“The national government’s savings account…remains at healthy levels, in fact now at the highest balance to date at P824 billion,” he said.
On top of this, the Bureau of the Treasury recently raised over P500 billion from its retail treasury bond offering, which could boost the government’s savings further to P1.3 trillion, he said.
Mapa said the projected amount shows how much “muscle …the fiscal authorities can wield to battle the fallout from Covid-19.”
“With the economy projected to only return to a base effect-induced growth by 2Q 2021, investors and Filipinos can take comfort knowing that the government continues to have scores of funding and more at its disposal to endure what will likely be a long drawn-out battle with the pandemic,” Mapa added.
To recall, Mapa said that the delay in passing of the budget last year resulted in a build-up of P763 billion in the government’s deposit account in May. Authorities went on a “spending binge” following its approval, with the balance ending at P159 billion by end-2019, he added.
“Once the 2019 budget was passed, authorities were on a mission to churn out the unused budget, even passing legislation to allow unused 2019 funds to be spent in 2020,” Mapa said.
Earlier, Mapa said that passing “substantial” fiscal packages are helpful in combating an economic recession, noting that this is what the country’s neighbors in the Asean region are doing.
The economist pointed out that the lockdown measures have left many Filipinos jobless, thereby affecting consumer spending. The decline in household consumption, he said, can then hit revenue collection.
“Recognizing that it is indeed consumption that makes the little Philippine economy tick, perhaps an alternative strategy would be to come out swinging and look to land a knockout punch of our own,” he said. “Consumption begets more consumption and in turn can help drive government revenues which translates to the government spending multiplier effect.”
The House of Representatives recently approved on third and final reading the proposed P162-billion Bayanihan to Recover as One Act or the Bayanihan II. The bill seeks to cushion the potential losses from the pandemic.