Based on documents obtained by BILYONARYO, Dominguez proposed to senators to “direct the discontinuance of unutilized, automatic appropriations for debt service and available appropriations for redemption of maturing government securities not to exceed P100 billion.”
In his proposed revisions to the proposed second phase of the “Bayanihan to Recover As One” bill pending in the Senate, Dominguez said this P100 billion realignment would be made “notwithstanding any law to the contrary.”
The Philippines has a n Automatic Appropriation Law which compels the government to earmark a big chunk of its budget for debt servicing before spending for social and economic activities. This is based on a decree issued in 1977 by then President Ferdinand Marcos who wanted to ensure that all loans he made under his watch would be paid, behest or not.
Roughly 11 percent of the P4.1 trillion budget in 2020 is for debt servicing.
Dominguez planned to use the savings generated from the stop in debt payments to augment the P130 billion he proposed to stimulate the post-lockdown economy.
Dominguez is doggedly sticking to his playbook not to make a splashy economic stimulus program to be bankrolled by debts.
Instead, Dominguez has opted to keep the stimulus package modest compared to the Philippines’ Southeast Asian neighbors by tapping franchise taxes from Philippine Offshore Gaming Operators, government savings or unspent funds in the 2019 and 2020 budgets, excess revenue collections, money from new taxes, and money from any government-owned or controlled corporations (GOCCs) to bankroll the COVID funds.