Gov’t Php1.5T COVID-19 response strategy bloated, misleading

April 23, 2020

by IBON Media & Communications

The Duterte administration continues to be misleading about its COVID-19 response strategy, research group IBON said. A closer look shows that the government is not actually spending as much as it claims, the group said. This casts doubts on its real efforts to battle the pandemic, especially when it comes to the most vulnerable Filipinos.

The Department of Finance (DOF) recently announced that Php1.49 trillion would be allotted towards the administration’s 4-pillar socioeconomic strategy against COVID-19.  The 4-pillar program is supposed to ensure emergency aid to the poorest and vulnerable Filipinos, medical resources to fight the pandemic, fiscal and monetary actions to keep the economy afloat, and an economic stimulus plan.

“The Duterte government is still being intentionally misleading about its COVID-19 response measures – which makes one doubt what else about the COVID-19 crisis they’re being untruthful about,” IBON executive director Sonny Africa said.

Africa noted the DOF claiming on its website that the “total budget” of the 4-pillar strategy is now at Php1.49 trillion. He said this gives the impression that the government is spending Php1.49 trillion to respond to the pandemic.

In truth, it aims to spend just Php366.9 billion, and allocate Php133.7 billion for loan programs (Php13.7 billion) and credit guarantees (Php120 billion), he said.

The Php366.9 billion includes only Php316.2 billion in social assistance which barely covers what IBON estimates is at least Php297 billion needed for every month of the lockdown, said Africa. The balance of Php50.7 billion is for the health response and is hopefully enough to deal with the worst public health crisis in the country’s history.

Africa also pointed out that the Php1.49 trillion budget – which gives the impression of huge spending for COVID-19 response – is bloated by items that should not even be counted as part of this supposed budget.

Among these is the Php142.8 billion in tax cuts, deductions and forgone revenues. These are not actually spent even if they are income losses for the government, he said.

The reported Php233 billion in estimated additional liquidity in the financial system from cuts in interest rate and reserve requirement cuts should not be considered spending, said Africa. It is also not even sure how much of this will actually go to any kind of COVID-related response, he added.

The Php610 billion in additional financing from foreign lenders (Php310 billion) and the Bangko Sentral ng Pilipinas purchase of government bonds (Php300 billion) are also not spending as such. Africa said that it would even be double-counting if any of this goes to the targeted Php366.9 billion in spending or the Php133.7 billion in loan programs/credit guarantees.

Africa said that the Duterte administration’s inability to properly cost its COVID-19 response measures is a direct result of its still not being clear what exactly its plan is. This despite being nearly six weeks into the lockdown already. “The government can be honest about this and the efforts it is taking, instead of, almost maliciously, trying to cover this up by dazzling the public with huge figures in the trillions of pesos,” Africa said.