House exploring ‘deficit-neutral’ ways to finance third stimulus

A THIRD ROUND of economic stimulus is likely to be enacted and Congress is currently exploring with economic managers how to fund it without adding to the budget deficit, including withdrawing retained earnings from government corporations, the chairman of the House of Representatives committee on ways and means said.

In a statement Monday, Representative Jose Ma. Clemente S. Salceda said the proposed Bayanihan to Arise as One Act, informally known as Bayanihan III, will be put together without exceeding the caps on deficit spending set by economic managers, with legislators currently in talks with the Department of Finance (DoF).

“In all likelihood, there will be a third Bayanihan measure. It will be deficit-neutral, if my work with Secretary Dominguez succeeds,” he said.

The third Bayanihan bill aims to support the economic recovery with the coronavirus disease 2019 (COVID-19) pandemic remaining uncontained. Bayanihan III follows the Bayanihan to Heal as One Act, which was signed on March 24, 2020, and the Bayanihan to Recover as One Act, which was signed on Sept. 11.

Mr. Salceda said he proposes to temporarily increase the minimum dividend to be paid by government-owned and -controlled corporations (GOCCs) to 75% from 50% via an amendment to Republic Act 7656.

“There are GOCCs that have accumulated more retained earnings over the years than they can deploy, especially now. Authorizing a distribution of excess dividends in favor of the government would allow us to mobilize sleeping money for COVID-19 response without hurting our overall fiscal standing… this is a suggestion I made to the DoF, which will then survey the full list of GOCCs for possible capital withdrawal,” he said.

Mr. Salceda added the need to immediately pass proposed measures to tax online cockfighting, known as e-Sabong, and Philippine Offshore Gaming Operators (POGOs) as these will be possible funding sources for Bayanihan III. Both proposed tax measures have gained support from the DoF.

He said with such funds, the government will be capable of funding more cash aid to households.

“The tug-o-war is between those who want ayuda (cash aid) by increasing our debt, and those who say we cannot borrow more. We need ayuda, so I mediated by providing options that will not increase our deficit, including more GOCC remittances, capital withdrawal from GOCCs, and taxes on POGOs and e-Sabong. That intervention appears to have broken the gridlock,” he said. — Gillian M. Cortez