Dominguez is wrong!

April 16, 2020

Mindlessly paying off debt while letting the country starve.

The policy rigidity may be fiscally correct, but it is decidedly morally wrong, ethically repugnant.

Where is the political correctness in that?

And we have to fully agree with and strongly support a feisty and very discerning lady lawmaker in reminding the country’s chief economic official who his true bosses are after the President.

In a statement, Sen. Imee Marcos said: 

I understand Secretary Dominguez's frustration that COVID-19 is slowly undoing all the hard work that the Department of Finance has put in to keep the country's economy in good shape.

But COVID-19 is the enemy, not me. I plead Secretary (Carlos) Dominguez not to take things personally when I stand my ground that the government should suspend payment of the country's debts to fund more urgent cash aid for millions of Filipinos who will surely go hungry if the pandemic lasts longer than expected and keeps them in lockdown.

A debt moratorium is neither mendicancy, nor theft, nor hopeless indebtedness. It is a necessity, according to the International Monetary Fund, if nations with meager resources and weak health care systems are to survive this crisis. In Southeast Asia, COVID-19 has hit the Philippines the hardest.

President Duterte has emphasized that government resources are not inexhaustible. A debt moratorium can substantially stretch the lifeline of resources that must reach as many people as cry out for help, as far as the remotest barangay infected by the virus, and hopefully as long as this crisis will last.

While Secretary Dominguez and I are still lucky to have three square meals a day, hundreds of thousands if not millions of Filipinos with no access to the media are going hungry, unseen Filipinos whose patience and belief in government are being tested every single day that promised aid does not arrive.

All out na po tayo, please sir, all heart! Marami nang Pilipinong gutom. Itodo na po natin ang tulong sa ating kapwa!

Marcos, who chairs the Senate committee on economic affairs, earlier said a debt moratorium is a third measure that the Department of Finance can adopt, besides the budget realignments and international loans it has already announced, to continue funding the government's social amelioration program while the true duration of the lockdown remains uncertain.

The budget for interest payments on the country's debts in the General Appropriations Act of 2020 amount to P451 billion, which Marcos said can be used for cash aid by the government under the Bayanihan Heal As One Act.

The lady lawmaker added that off-budget payments of P582 billion to amortize the principal amount can also be reserved for cash aid.

More cash aid would be needed if the advance of the global pandemic results in extended lockdowns throughout the world and continues to limit business operations and people's means of earning a living, she said.

Marcos explained that a debt moratorium is in line with the World Economic Forum's call for international cooperation in handling the backlash of the COVID-19 crisis, adding that not even the world's biggest economy, the United States, can deal with the global pandemic on its own.

"Dapat bigyan ng palugit ang mga bansang mas maliit ang ekonomiya at mas mahina ang pamamaraan para sa pagpapagamot ng kanilang mamamayan, lalo na ang mga bansa sa Asya at Africa," she  said.

Marcos also said the possible extension of a lockdown beyond April 30 behooves the government to immediately identify more sources of funding for cash aid to the poor to prevent social unrest.

She estimated that at least P550 billion can still be added to the P200-billion emergency budget now being used for cash aid.

The Department of Finance  must move quickly to avail of loans and take advantage of a window of opportunity that is gradually closing, Marcos said, noting that the global Covid-19 crisis could last months longer, pull down the country's investment risk ratings, and affect bank interest rates on loans.

"Hindi economic target ang dapat natin sagipin ngayon kundi buhay ng tao. Bakit kasi nagkukuripot ang DoF kung marami naman ang pwedeng pagkunan ng pondo?" she said.

The lady  lawmaker repeated her call made last month that the DoF can borrow about P440 billion, an amount that would still be within a "manageable debt ceiling of 5.4 percent," from the present 3.2-percent level being maintained by the government.

Additional funds can also be sourced from unused savings from the 2019 national budget, calamity and contingency funds of government departments and agencies like the Philippine Amusement and Gaming Corp., Philippine Charity Sweepstakes Olady ffice, PhilHealth, and the Office of the President.

Reported cases of Covid-19 infection are expected to rise in April, as the Department of Health begins to expand its capacity to conduct tests on a larger scale and plot the progress of the pandemic, Marocs said.

The government has come up to date with about P1.17 trillion worth of fiscal and monetary measures to help Filipinos combat the effect of the Covid-19 pandemic, according to Dominguez.

“We have a long breakdown of how we have this program but mostly, it was to provide subsidies for the low-income families and workers of the small and medium enterprises,” he said, citing that these fiscal and monetary measures account for about five percent  to six percent of domestic output.

These measures include the P205 billion realigned so far from this year’s national budget as mandated by the Bayanihan to Heal as One Act, and the P300 billion used by the Bangko Sentral  to purchase government securities that would be repurchased within six months, which would boost the national government’s funding capacity;