FISCAL and monetary measures implemented by the Philippines last year in response to the pandemic lagged the packages rolled out elsewhere in the region, the Asian Development Bank (ADB) said in a report Monday.
The ADB estimated that the combined value of the policy measures rolled out by the government and the central bank at $22 billion or $200 per capita between March and December, equivalent to 5.9% of gross domestic product (GDP).
In its report, “One Year of Living with COVID-19: An Assessment of How ADB Members Fought the Pandemic in 2020,” the ADB said: “The packages of the Philippines and Indonesia appear similar in terms of their monetary values,” noting that Indonesia spent about $426 per capita, while Malaysia, Thailand and Singapore spent $2,528, $1,208 and $15,629, respectively.
The bank said the Philippines spent more than expected, having been projected initially to be capable of mobilizing only $145 per capita.
While the ADB said it is difficult to determine whether a package is sufficient to address the crisis, it said most economies studied were able to increase their spending above the predicted levels. However, richer countries were able to roll out much larger packages than the rest of the region.
Globally, the value of health and income support by governments amid the pandemic hit 10.4% of GDP, more than the 2% mobilized during the global financial crisis of 2007-2008.
“The idea of austerity has sharply reversed from the policy response to the previous crisis only 12 years ago. Fiscal demand management was already gaining popularity, but the pandemic has thrown remaining budgetary caution to the wind — governments have spent vast sums to manage the current crisis and promote recovery,” it said.
“The government-imposed lockdowns were a severe shock to supply chains. In that respect, government efforts to support businesses and households in maintaining their pre-pandemic financial positions during the lockdowns in what they hoped would be temporary layoffs were by far the best targets for macroeconomic policy responses to the pandemic,” it added.
As of April 26, the Philippines’ pandemic spending was $30.32 billion or $280.5 per capita, equivalent to 8.24% of GDP, according to ADB estimates.
The Philippine package was bigger than Vietnam’s $279.6 per capita and behind Indonesia’s $426. Singapore and Malaysia spent $17,621 and $3,064, respectively.
The ADB said in the report that the policy measures rolled out by governments and central banks were focused on providing liquidity, encouraging lending, and direct funding, through lending programs, loan moratoriums, cash handouts, and tax breaks, among others.
Amid calls for a third stimulus package to help the Philippine economy recover this year, Economic Planning Secretary Karl Kendrick T. Chua said in a briefing Tuesday that the government should prioritize spending funds from the previous and current budgets and the leftover amounts from the second stimulus package to fully implement the relief measures authorized by those programs.
Mr. Chua said the P4.5-trillion budget for this year has P284 billion in subsidies, while funds remaining from the extended 2020 budget and the Bayanihan to Recover as One Act, known informally as Bayanihan II.
“On the proposed third stimulus package, we support the proposal to help the people, especially those afflicted by hunger and joblessness. (But) we have to be prudent in finding a revenue source or savings to fund these important programs,” he added.
The Department of Budget and Management said Tuesday that it had released P646.97 billion for pandemic-related programs as of mid-April.
This includes P387.17 billion from the first stimulus package as authorized by Republic Act 11469 or the Bayanihan to Heal as One Act (Bayanihan I); P260 billion from Bayanihan II. Some P6.46 billion was released from other sources.
Funds from the extended 2020 budget are valid until the end of the year but Bayanihan II is set to expire by June 30. — Beatrice M. Laforga