Amid the increasing likelihood of a slow recovery for the Philippines, Camarines Sur Rep. LRay Villafuerte has appealed to the Senate to help boost economic-stimulus spending by passing a House-approved measure anchored on much higher infrastructure investments to invigorate the economy and accelerate its bounce back from the coronavirus-driven global recession.
Villafuerte, a member of the newly formed independent majority bloc BTS Congress headed by former Speaker Alan Peter Cayetano, expressed the hope that senators would consider and pass its version of the Covid-19 Unemployment Reduction Economic Stimulus (CURES) bill.
“I am appealing to our senators to consider passing the House-approved CURES bill in order to reset the stalled economy back on its pre-Covid-19 high-growth path.”
Sponsored by over 200 legislators led by Cayetano and Villafuerte and then passed by the House in June 2020, the CURES substitute measure—House Bill (HB) No. 6920—proposes a three-year P1.5-trillion stimulus program, in a bid to ramp up state spending on health, education, agriculture, local roads, livelihood, information and communication technology (ICT) and tourism (HEAL IT) infrastructure.
“In light of the somber forecasts by various international financial institutions that the Philippine economy is heading for a slow recovery, partly because of the government’s relatively smaller fiscal stimulus package, I am appealing to our senators to consider passing the House-approved CURES bill in order to reset the stalled economy back on its pre-Covid-19 high-growth path and serve as an initial booster as well for President Duterte’s new initiative—Balik Probinsya, Bagong Pag-asa (BP2) program—to decongest Metro Manila by creating a lot more infrastructure jobs in the countryside,” Villafuerte said.
Villafuerte also authored HB 6970, which aims to fast-track the implementation of President Duterte’s BP2 program by establishing a township revitalization programs to entice businesses to relocate to the countryside and thus encourage people to return to their home provinces and get jobs there.
He pointed out that the CURES stimulus package aims to blunt the impact of what the International Monetary Fund (IMF) last year described as the worst global recession since the Great Depression in the 1930s by resetting economic activity and creating so many jobs in the countryside.
“CURES will at the same time boost President Duterte’s BP2 program by encouraging city dwellers to return to their home provinces amid the prospects of more employment and livelihood opportunities in the regions outside the national capital,” he added. “It is also meant to encourage people in the provinces to stay put and get newly available jobs there instead of relocating to Metro Manila in search of better livelihood opportunities.”
With infrastructure investments having the highest multiplier effect on the economy, Villafuerte said “the House passed the CURES bill in June 2020 to dramatically raise state spending on HEAL IT projects and thereby spur the domestic economy’s quick recovery from the coronavirus pandemic’s economic fallout.”
Villafuerte said that greater economic activity resulting from higher infrastructure spending “would boost business and consumer confidence, and generate a lot of jobs to offset those that were lost following last year’s economic standstill, which was a result of the mobility restrictions imposed by the government since March 2020 to hold back the coronavirus pandemic.”
He explained that CURES seeks to create, appropriate and automatically release a special outlay dubbed the CURES Fund equivalent to P1.5 trillion over a three-year period to bankroll infrastructure projects in the HEAL IT priority areas, at P500 billion-worth of projects per year.
Villafuerte, who was the lead author in the House of last year’s Bayanihan 1 and Bayanihan 2 laws, earlier lauded President Duterte for signing laws extending the validity of unspent funds under both the 2020 General Appropriations Act (GAA) and Bayanihan 2, which, he said, would let the government further accelerate public spending and fast-track the recovery of the domestic economy from the pandemic-induced economic turmoil.
In welcoming the President’s enactment into law of both bills that he co-authored, Villafuerte said that increased public investments are needed to jumpstart economic activity and boost consumer spending, especially now amid the reality that “we still have a long way to go before this lingering lethal virus is defeated across the globe.”
Villafuerte, who sponsored separate bills extending the validity of Bayanihan 2 and the 2020 GAA, said “the government needs to spend a lot more on measures to stimulate economic activity, provide relief to pandemic-hit businesses and boost consumer spending amid forecasts by international institutions like the World Bank, Asian Development Bank (ADB) and Moody’s Analytics that it could be a slow recovery for the Philippines for not been spending as much as its neighbors on fiscal stimulus programs.”
“CURES will at the same time boost President Duterte’s BP2 program by encouraging city dwellers to return to their home provinces amid the prospects of more employment and livelihood opportunities in the regions outside the national capital.”
Villafuerte also pushed last year the approval of a Bayanihan 3 bill, this time for special funds for the massive rehabilitation and reconstruction efforts in his home-region of Bicol and other areas in Luzon pummeled by the three strong powerful storms—Quinta, Rolly, and Ulysses—that hit the country in quick succession in the last quarter of 2020.
In its latest report, Moody’s Analytics sees the Philippines to be the last country in the Asia-Pacific region to regain its pre-2020 growth level as it carries out a relatively smaller fiscal stimulus.
For the ADB, the Philippines needs to increase spending on measures to check the pandemic, given that its Covid-19 response package estimated at $21.645 billion is equivalent to just 5 percent of gross domestic product (GDP).
In comparison, Singapore’s response package is $89-billion representing 25% of its GDP, followed by Malaysia’s $81 billion (23% of GDP) and Thailand’s $84 billion (16% of GDP).
Villafuerte said that under the CURES bill, the P1.5-trillion stimulus package would be made available to projects ranging from barangay health centers and municipal and city hospitals to digital equipment for testing, “tele-health” services, and e-prescriptions to post-harvest facilities, bagsakan centers, and food terminals, among others.
Such funds would also be available for infrastructure projects like walking or bicycle lanes; bridges across creeks and irrigation canals; evacuation centers and disaster emergency facilities; and roads going to tourist spots, beaches, mountain parks, new business districts or economic zones, and hubs for small and medium-sized enterprises.
An initial P500 billion of this CURES Fund shall be released on the first year of this 2020-2022 economic stimulus and employment program, with P500 billion more for release on the second year, and the remaining P500 billion on the third and final year.
After the third year of the program’s implementation, the bill mandates the Congress to enact legislation either extending CURES or terminating its Fund. In case the program is terminated and there are un-obligated funds left in the Fund, the said balance shall be made available for the general budgetary requirements of the succeeding year after the project’s termination.
He recalled similarly ambitious programs in the past, such as the Civilian Conservation Corps (CCC) program in 1933 to create three million jobs in the United States (US) during the Great Depression, the Economic Cooperation Act of 1948 or Marshall Plan that was enacted by the US Congress to rehabilitate its war-torn allies in Europe after World War II and the Emergency Employment Act of 1962 passed by the Philippine Congress to create an Emergency Employment Administration to carry out large-scale public works projects.
Villafuerte said this CURES proposal is akin to the “New York Forward” initiative of New York Gov. Andrew Cuomo to build back a State better than the pre-pandemic New York by addressing systemic issues that have limited opportunity and progress for all New Yorkers while making its economy and workforce more resilient to future pandemics.