Read on Twitter
The budget was never the problem. Finding savings is not the problem. The issue right now is liquidity- how to source the cash right now so it can be given to people for social amelioration, buy PPEs & kits, & pay for govt employee wages (~100B).
No need yet to borrow more than program for 2020 because we still dont know how much we need. But the crucial point is how to get the money fast enough, now. Time value of money = if we need cash now, the cost to get the cash is more expensive. Can govt stomach higher cost?
Of course since taxes will be lower, all things being equal, borrowings will be higher in the aggregate at year-end if we maintain projected level of spending before the COVID happened. But that& #39;s beside the point. The crucial question now is how & when to source cash & how much
So ask your govt: What& #39;s the plan? What would people expect in terms of social amelioration & support for businesses? What& #39;s the total cost for everything? How to phase the implementation? Only then can DOF/BTr properly plot the financing & how soon they need to raise the funds.
Because we can& #39;t just borrow everything in one go without knowing where to spend it. At the same time, di pwedeng patingi-tingi. Both of these scenarios only mean higher cost of financing & possible danger of mortgaging our future fiscal position.
No need to worry about appro & savings NOW because Section 4(v)(10) of the Bayanihan Act allows for the "reviving" of discontinued budget items where savings will be sourced. So theoretically, then can be augmented & implemented before year-end.
Tracing savings & augmentation NOW isnt useful yet, for watchdogs. We need to see these items at YEAREND, instead. Only by then can we see which projects were really discontinued. Hopefully, on a personal note, these are mostly pork insertions that were under For Later Release
Liquidity is our problem but the national government can handle it. I& #39;m more worried about the liquidity of LGUs. May pera pa ba sila? May access ba sila to credit from banks? Kumusta kaya ang interest rates nung panghihiram nila? Ano kaya ang hininging collateral ng mga bangko?
Also, I caution on using the term "supplemental budget" during this time- a) the "275B" is part of the 4.1T 2020 budget & b) no need to pass a special appro bill (yet). 2020 GAA + Bayanihan Act have sufficient authorizations (in pesos) & rules flexibility, for now.
Bakit walang cash? Because we are likely going to spend more on March-May 2020 than we did back in Mar-May 2019 & our financing program did not anticipate this spike. Mar-May 2018 natl govt spending: 587B; of which: 265.4B is for salaries already.
17.96M families x PhP 8,000 = 143.68B
Salaries for govt employees = ~100B
~240B of cold, hard cash per month just for these 2 items.
Salaries for govt employees = ~100B
~240B of cold, hard cash per month just for these 2 items.
