House, economic team to iron out revenue sources for Bayanihan 3

MANILA – The leadership of the House of Representatives and the Philippine government’s economic managers will meet on Wednesday to iron out some differences in both the spending side and the revenue side of the proposed Bayanihan to Arise As One Act or Bayanihan 3.

In a statement on Monday, Albay Rep. Joey Salceda, House Ways and Means Committee chair, said Congress would propose to finance the PHP405.6-billion stimulus package under Bayanihan 3 using new revenue streams.

Salceda said the premise of the proposed revenue sources in the package takes into account that “whatever existing sources there are must have already been used for the regular budget”.

“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,” Salceda said.

He said financial assistance ranging from PHP5,000 to PHP10,000 for every household affected by the coronavirus disease (Covid-19) will be targeted based on the poorest segments of the population.

Aside from this, he noted that all Filipinos will receive financial aid as a form of universal basic income that will be given in two tranches of PHP1,000 each.

“On the PHP5,000 to PHP10,000 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 PHP5,000-10,000 is a top-up. But we will have to see what the government can afford,” he said.

He said the government can fund Bayanihan 3 by annuitizing the payment to some number of years, through gaming taxes on Philippine offshore gaming operators (POGOs) and e-sabong, or online cockfighting.

“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,” he said. “We can get future revenue flows whose present value equivalent meets the need for Bayanihan 3.”

He said the country could learn from the strategy of the USD2.2 trillion infrastructure plan of the Biden administration, in which they plan to pay for it with new revenues and closing tax loopholes, over time.

Under the Bayanihan 3 bill, the Bangko Sentral ng Pilipinas may make additional advances, with or without interest, to the national government of up to 10 percent of the average income of the national government for fiscal years 2018 to 2020 to finance expenditures authorized by law to address the Covid-19 pandemic.

Mandatory dividend remittances by government-owned and controlled corporations (GOCCs) will also be increased from 50 percent to 75 percent, while the President will have the power to withdraw capital from overcapitalized GOCCs.

The bill will provide funding of PHP108 billion for the implementation of a cash subsidy program of PHP1,000 for every Filipino and another PHP108 billion in standby funds.

The bill states that around PHP12 billion shall be appropriated for Phase 1 of assistance for households in crisis situations under the Assistance to Individuals in Crisis Situation (AICS) program of the Department of Social Welfare and Development (DSWD). Some PHP12 billion in stand-by funds shall be appropriated for Phase 2 and PHP6 billion for Phase 3 of the AICS program.

To assist micro, small, and medium enterprises, the Small Business Wage Subsidy program shall be continued and expanded with direct funding of PHP8 billion, and stand-by funds worth PHP8 billion for Phase 2 and PHP4 billion for Phase 3.