The Philippine government must first find ways to address significant underspending for COVID-19 measures before even considering to borrow new loans, a civil society group said on Thursday.
Social Watch Philippines issued this call after it released a study authored by Alvic Padilla that looked into COVID-19-related loans from the Asian Investment Infrastructure Bank (AIIB) and Asian Development Bank.
“We are still in a continuing disaster so there is no time to lose in providing for the needs of our people at the soonest possible time,” Padilla said on Thursday (17 December 2020), two days after it was reported that the Senate approved on final reading two measures extending the validity of the 2020 national budget and the Bayanihan to Recover as One Act (Bayanihan 2). Once enacted, these measures will allow government to spend unutilized funds from the current budget until June next year.
Citing Department of Budget and Management (DBM) data, Padilla, in a public presentation of his study, stressed that the government spent less than what was programmed during the pandemic. [To read or download a copy of his presentation, please click here. To read or download a copy of the study itself, please click here.]
Instead of spending P3.268 trillion from January to September this year, the national government only utilized P3.022 trillion or 7.5% less than programmed, the DBM said on its website.
As of September 2020, the government has borrowed $9.9 billion to address COVID-19, based on data from the Department of Finance (DoF).
One of these loans is the $750-million Asian Investment Infrastructure Bank (AIIB) Loan, which, in turn, was the subject of the study undertaken by SWP.
“The national government should strengthen its administrative capability to address underspending of COVID-19 loans,” said Ma. Victoria R. Raquiza, the group’s co-convenor, shortly after the public presentation of the study through an online video conferencing platform.
This includes “addressing rigidities in the system that has delayed spending for and distribution of aid to a wide swathe of our people negatively affected by the pandemic.”
According to Raquiza, slower fund use is exemplified by the Department of Social Welfare and Development (DSWD), the primary agency in charge of providing aid and relief to the most vulnerable groups. In November, it was reported that the agency failed to utilize its P83-billion allotment for this year, she said.
Raquiza, also a professor at the National College of Public Administration and Governance at the University of the Philippines, reiterated that there is a need to balance the prudent use of funds with the need to be more flexible and lenient in the application of certain rules in order to expedite and fast-track the release of funds for COVID-19 programs. Unless these adjustments are undertaken, then underspending may continue.
Meanwhile, Padilla’s report entitled “A Scoping Study on the Asian Infrastructure Investment Bank’s COVID-19 Loan to the Philippines,” also called on the government and its creditors to “provide and broaden meaningful spaces” that will allow citizens’ groups to keep better track of the use and effectiveness of COVID-19 loans.
Once these spaces are made more open and participatory, citizens will be able to “unpack and analyze the performance of agencies implementing critical COVID-19 measures on health, social protection, and economic relief for vulnerable groups,” Padilla’s study said.
“Citizens’ monitoring of these loans will help ensure that the loan proceeds are spent in the most effective, efficient, and timely manner,” the study said. “It is also essential to monitor the impacts of servicing these debts in tax and budget policies in the long-term and to engage government into taking fiscal measures that will promote sustainable, equitable, and adequate financing for development.”