Press Releases

On Government financing for Bayanihan 3

May 10th, 2021

Congress proposes to finance the package using new revenue streams. We did take into account that whatever existing sources there are must have already been used for the regular budget. In fact, this is the premise of the proposed revenue sources in the package.

On May 12, the House leadership and the President’s economic team will meet again to iron out some differences in both the spending side and the revenue side. We will have to meet at some figure, but the responsibility of Congress is to present the needs of the people first, and then adjust our response based on the availability of new or existing funding.

On the P5-10k assistance, this will be targeted, based on the poorest segments of the population. So, this is not universal. But there will be a universal basic income component to ensure nobody falls through the cracks. The P5-10k is a top-up. But we will have to see what the government can afford.

My advice to both my colleagues in the House and my counterparts in the economic team is that, while we must guard our deficit levels, we should not fixate on existing fiscal limitations. How we pay for Bayanihan 3 can be annuitized to some number of years, through gaming taxes on POGOs and e-sabong, for example.

We can get future revenue flows whose present value equivalent meets the need for Bayanihan 3. This is the strategy of the USD 2.2 trillion infrastructure plan of the Biden administration. They plan to pay for it with new revenues and closing tax loopholes, over time. We can certainly learn from that approach

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