April 12th, 2021
Salceda: “Bayanihan 3 will be funded;” House tax chief says House tax committee and Finance department finding ways to craft ‘deficit neutral’ lifeline measures
House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) in an interview with the House press corps today said that a third Bayanihan measure, composed primarily of what Salceda describes as “lifeline measures,” will be funded in a way that does not increase the country’s deficit. Salceda says he is working with the Department of Finance (DOF) to find revenue sources for the measure.
“In all likelihood, there will be a third Bayanihan measure. It will be deficit-neutral, if my work with Secretary Dominguez succeeds,” Salceda said.
“The question of funding was very tangled, but what cut the Gordian knot is the proposal to increase mandatory dividend remittance of GOCCs from 50% to 75%, temporarily. This will require an amendment of RA 7656 or the Dividends Law. This is probably worth P70 billion,” Salceda added.
Salceda also proposed to allow the DOF to make capital withdrawals from “obese” GOCCs.
“There are GOCCs that have accumulated more retained earnings over the years than they can deploy, especially now. Authorizing a distribution in excess of dividends, in favor of the government, would allow us to mobilize sleeping money for COVID-19 response without hurting our overall fiscal standing,” Salceda explained.
“This is a suggestion I made to the DOF, which will then survey the full list of GOCCs for possible capital withdrawal,” Salceda added.
Pass taxes on e-sabong, POGO
Salceda also says that the DOF will soon endorse the passage of taxes on offsite cockpit betting operations or e-sabong, and Philippine Offshore Gaming Operations (POGO).
The House has already passed its versions of these reforms, with Salceda as principal sponsor.
“Secretary Dominguez supports the POGO taxes. He is also inclined to endorsing the e-sabong tax, but wants a study on the matter. I have already asked the Committee secretariat to supply the necessary materials so his staff can run the numbers,” Salceda said.
Salceda says the Senate is likely to pass POGO taxes as soon as session resumes, and will discuss the e-sabong taxes soon as well.
“We think we will have bicam on these measures by May or June,” Salceda said.
Bayanihan 3 will be primarily ‘lifeline’
Salceda adds that Bayanihan 3 will be principally composed of lifeline measures, or measures to immediately alleviate poverty and hunger.
“We can’t do full-blown stimulus just yet because we have not yet maximized mobility. When the velocity of money is slow, it is unwise to infuse liquidity for growth. But we need to feed our people. So, actually, Bayanihan 3 will not be stimulus, but mainly lifeline,” Salceda said.
The current draft of the technical working group (TWG) on Bayanihan 3 includes P108 billion for universal basic income of P1,000 per head, with another P108 billion in standby funds; P12 billion in direct funding for assistance for individuals in crisis situations (AICS) of the Department of Social Welfare and Development, and P3 billion for Medical Assistance for Indigent Patients (MAIP).
Salceda adds that there will also likely be some room for the P54 billion Pension and Gratuity Fund that the Speaker is prioritizing.
“Stimulus will be much more effective later, when we begin returning to normalcy. Our top priority now is to keep our people alive.”
“The tug-of-war was between those who wanted ayuda by increasing our debt, and those who said we could not borrow anymore. We need ayuda, so I mediated by providing options that will not increase our deficit, including more GOCC remittances, capital withdrawal from GOCCs, and taxes on POGOs and e-sabong. That intervention appears to have broken the gridlock. We will have Bayanihan 3,” Salceda said.