President Duterte’s economic team is now working hard to raise additional funds by using the government’s arsenal of fiscal and monetary tools and tapping concessional financing options from multilateral institutions to keep the economy afloat and help it bounce back quickly once the 2019 coronavirus disease (COVID-19) pandemic is over, Finance Secretary Carlos Dominguez III said.

Dominguez said this economic bounce-back plan is among the four pillars of the Duterte administration’s socioeconomic strategy against COVID-19, which also covers the emergency support for the poor and other vulnerable groups, the resources needed to fight the pandemic, and the fiscal and monetary actions to fund emergency initiatives and keep the economy afloat amid the global health crisis spawned by this highly contagious virus.

This new set of government priorities will require around P1.17 trillion-worth of fiscal, budgetary and monetary measures, of which almost a third or around 1.6 percent of the country’s gross domestic product (GDP), will go to emergency subsidies for poor and low-income households plus other vulnerable groups suffering the most from the pandemic’s economic hit.

Dominguez said the Duterte administration’s flagship projects under the “Build, Build, Build” program will continue and will not be downgraded, as this will primarily “fuel our bounce back plan.”

“Right now, the government has sufficient funds to implement the program as the President announced it and as provided in the Bayanihan to Heal as One Act. I think what the President was referring to was the need in the future for additional funds to restart the economy. And definitely we in the Department of Finance (DOF) together with the other economic managers, are working very hard to make sure that not only do we have the sufficient funds for this contagion now, but we will have sufficient funds for our bounce back plan when this COVID-19 contagion is over,” Dominguez said in a phone patch interview with CNN Philippines on Monday morning.

Dominguez was referring to a query about the President’s earlier instructions to him to raise more funds for the government to ease the social and economic impact of COVID-19 on the Filipino people.

On top of providing economic relief for poor families, Dominguez said the needs of the middle class who are regularly employed have also been initially addressed under Republic Act (RA) No. 11469 or the Bayanihan Law through the grant of grace periods or extensions for them to pay their amortizations and other forms of loans.

“Those (provisions under the Bayanihan law) are designed primarily for the middle class because it’s the middle class that has housing loans, it’s the middle class that have credit card loans, etcetera,” Dominguez said.

Those belonging to the middle class who are part of small businesses are covered by the emergency subsidy package rolled out by the government, in the form of wage subsidies amounting to P35 billion, among other forms of relief assistance, Dominguez said.

He also said the government will unveil an assistance package for the middle class employed or operating micro, small and medium enterprises (MSMEs), including a loan guarantee program for them.

As for ending the Luzon-wide Enhanced Community Quarantine (ECQ) that was imposed to stop the spread of COVID-19, Dominguez said the government must study this “very carefully” and weigh the potential risks, such as the possibility of additional infections and fatalities that could overwhelm the local healthcare system.

Asked whether the government can manage an ECQ extension that will last until June, Dominguez said: “We will make sure that there will be enough funds to support those decisions. We are watching this very carefully and we are moving very conservatively.”

Under the Duterte administration’s four-pillar strategy against COVID-19, the emergency support for vulnerable sectors will cover around P305.2 billion of the government’s P1.17 trillion package of measures.

This includes the P205 billion needed to provide subsidies of P5,000 to P8,000 for two months to 18 million poor and low-income families hit the hardest by the economic impact of COVID-19.

The government will also be marshalling around P35.72 billion of its resources to defeat COVID-19.

This amount will cover the health insurance for COVID-19 patients; special risk allowances and hazard pay for frontline health workers in public hospitals; purchase of personal protective equipment (PPEs) and other essential medical supplies for frontliners; and increased testing and improved capacity of the healthcare system, among others.

Fiscal and monetary measures, which will benefit every Filipino by raising funds for emergency initiatives and injecting more liquidity into the economy, will amount to about P830.47 billion.

This pillar includes accessing additional funds of up to P310 billion from multilateral institutions such as the Asian Development Bank (ADB), World Bank and the Asian Infrastructure Investment Bank (AIIB); the purchase by the Bangko Sentral ng Pilipinas (BSP) of P300 billion-worth of government securities under a repurchase agreement with the Bureau of the Treasury (BTr); the lowering of interest rates and the reserve requirement ratio (RRR) for banks, which is expected to pump an extra P220 billion into the economy; and the extension of tax-compliance deadlines and exemption from the documentary stamp tax (DST) for credit extensions or restructuring of loan payments, which will cost around P470 million.

The fourth pillar, which covers the economic recovery plan under a post-ECQ scenario, is now being designed by the economic team headed by Dominguez.

This team is currently conducting a nationwide survey to assess the economic damage wrought by COVID-19, especially on micro, small and medium enterprises (MSMEs).

Continuing the government’s investments on its “Build, Build, Build” program and its increased spending on social services is part of this fourth pillar to help revive the economy and sustain growth.

Dominguez said government is “financially able” to meet these massive funding requirements to fight COVID-19 because President Duterte has “managed the economy in a very rational way.”

He pointed out, for instance, that while the government has increased its revenue effort to 16.9 percent in 2019, which is the highest in 22 years, the President has ordered that public funds should only be spent on projects that are “economically viable.”

“So we are in a very strong financial position now. We are in a good position to take this hit from this COVID-19 problem,” Dominguez said.

He said the judicious spending policy set in place by President Duterte has kept the country’s macroeconomic fundamentals strong, with GDP growth averaging 6.4 percent since the Chief Executive assumed office in 2016.

Inflation has also remained low at 2.5 percent in March, which is within the 2020 target of 2 to 4 percent.

Dominguez said the Philippines has also maintained a manageable debt-to-GDP ratio of 41.5 percent in 2019, which is a vast improvement from the 70 percent in the past.

The Philippines’ 2019 debt-to-GDP ratio is also very low compared to other economies in the region, where one country’s debt has crept past 80 percent of its GDP, he added.

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