The government is now eyeing to sell its assets as a last resort to generate additional funds amid the mounting cost of its response to the Covid-19 crisis.
In his edited and recorded video message aired on early Thursday morning, President Rodrigo R. Duterte said he is ready to authorize the selling of government properties like the Cultural Center of the Philippine (CCP) and the Philippine International Convention Center (PICC) if necessary to raise additional income for its Covid-related measures.
“What is the end game if we already spent our funds? We will sell government properties,” Duterte said.
He said he will leave the task of selling the said properties to a committee to ensure the transaction will be as transparent to public as possible.
Duterte earlier admitted that the government’s existing P275 billion budget under the Republic Act (RA) No. 11469 or the Bayanihan to Heal as One Law is not enough for all its Covid-related expenses.
Loan option
He noted the government might not be able to generate revenue for the second quarter of the year to augment the said RA 11469 budget as companies are still reeling from the business disruptions caused by Covid-19 pandemic.
“Will we be able to follow up the collection? No. Why? Because the economy is dead [during the quarantines implemented for Covid]. There is no business. No one is paying. There are no workers who will have their salaries deducted [with income tax],” Duterte explained.
To compensate for this lower revenue, Finance secretary Carlos “Sonny” Dominguez III said they are now considering borrowing US$ 5.6 billion either from the Asian Development Bank (ADB) or the Work Bank.
If the loaned amount will still not be enough, Dominguez said that is the time they will tap the commercial market to borrow more cash.
He said he is confident government will be able to secure the loans especially since the country has BBB+ credit rating from international debt monitoring organizations.
“This means our budget deficit will increase from 3.2 percent to 5.3 percent. In other words, we will be spending more that what [revenues] we will be collecting,” Dominguez said.
Bleak outlook
He said the loaned amount will be used to mitigate the effects of the implemented government lockdown due to the Covid pandemic, to benefit the poorest families, small and medium enterprises and companies that are supported by their banks.
Dominguez reiterated earlier government projections that GDP growth will be either at zero or at worst, contract by one percent because of the Covid pandemic.
The health crisis, he noted, is also expected to lead to the temporary unemployment of 1.2 million workers.
In a statement issued on Tuesday, the Department of Labor and Employment (DOLE) said its has already assisted 440,000 workers, whose companies are implementing a flexible work arrangement or temporary closure because of Covid-19.
It said at least 715,000 more workers are applying for similar assistance.
SOURCE : BUSINESSMIRROR
