The government’s additional stimulus program, the Bayanihan to Recovery as One Act which was signed into law on Sept. 11, has sufficient funding, National Treasurer Rosalia de Leon said.
“Bayanihan 2 (is) adequately covered by debt service, savings, and additional income,” she told journalists in a Viber message Monday.
Aside from borrowings and additional income, Bayanihan 2 authorizes the Bangko Sentral ng Pilipinas (BSP) “to make additional direct provisional advances with or without interest to the national government to finance expenditures authorized by law that will address and respond to the Covid-19 (coronavirus disease 2019) situation”.
It said the additional funding can be accessed “provided that such additional direct provisional advances shall not, in their aggregate, exceed ten percent (10%) of the average income of the national government for FY (fiscal year) 2017 to 2019”.
The cash advance from the BSP should be tapped within two years from the effectivity of Bayanihan 2 and “shall be repaid before the end of one year” when it was availed.
“We proposed (a) higher (borrowing) cap to enable NG (national government) to avail of BSP facility to fund requirements against Covid and pursuing quick recovery,” de Leon added.
BSP has already extended a PHP300-billion funding to the NG through a repurchase agreement.
Under the deal, the funding would be used to purchase government securities, which can be repaid within three months.
The repayment period was given a leeway of another three months.
The New Central Bank Act, or Republic Act (RA) No. 7653, authorizes the BSP to lend to the NG an amount that is equivalent to 20 percent of the latter’s average revenues in the past three years, which to date is about PHP540 billion.
Source: Philippines News Agency