The government has the capacity to re-allocate budgets for infrastructure projects that cannot be implemented in the remaining months of the year for social protection programs, a former top monetary authority said.
During the virtual briefing of the Shareholders’ Association of the Philippines, former Bangko Sentral Deputy governor Diwa Guinigundo said the government can further improve the efficiency of its recovery program based on the quality and amount of the stimulus program.
Guinigundo said that since it is already the third quarter of the year and the rainy season has started, some projects under the “Build, Build, Build” program “can no longer be executed for the rest of the year”.
“So I think there is a scope, there is some flexibility for re-allocating some of the budget and whatever can be squeezed from that, re-allocation can always be re-allocated in favor of social spending or the ayuda (aid), support small businesses and of course, the rest of the vulnerable areas,” he said.
The former BSP deputy chief also discounted the need for any pork allocation for lawmakers right now, and cited the need for lump sum allocations to be “examined carefully to avoid unnecessary spending.”
“I think in that process, we would be able to squeeze more peso from whatever is left of the budget,” he added.
Aside from fiscal measures, Guinigundo said monetary policy measures implemented to cushion the impact of the pandemic on the domestic economy also play a major role in the economic recovery.
He noted cuts in banks’ reserve requirements, of as much as 200 basis points to date, have released about P700 billion to P800 billion, which the banks can extend as additional loans to support economic growth.
“So I think, it’s a question of getting all of these together and coming up with a more stimulative package both fiscal and monetary. I think it’s something that we should look at,” he said.