Tracking the COVID budget: Second portion meant to aid millions by end of May has not been released – ABS-CBN News

Monday, June 1st saw the last parts of the country emerge from the Modified Enhanced Community Quarantine (MECQ). As many Filipinos continue to return to work, we should revisit the status of the governments COVID-19 budget.

Ten weeks since the passing of the Bayanihan Act, 89 percent of targeted beneficiaries have received the first tranche (or portion) of government aid for social amelioration. This is up from 83 percent on May 18. But the second tranche of aid, which was slated for distribution by the end of May, remains unreleased by the Department of Social Welfare and Development (DSWD).

In a previous article, we examined the size, sources, and sectoral breakdown of the COVID-19 response budget under the Bayanihan to Heal as One Act (Republic Act (RA) No. 11469). As explained in that article, the response budget is actually larger than the oft-mentioned PHP 275 billion (theCovid-19 Citizens Budget Trackeror CCBT pegs its latest tally at PHP 385 billion) and that at least for now, the government has enough cash from revenues and borrowings to cover planned spending.

Based on available data, 46 percent of the total budgetor PHP 178.2 billionis reported to have been spent. The uptick in spending from two weeks ago is explained by:

Additional spending on social welfare (+ PHP 6.6 billion), labor support (+ PHP 4.2 billion), and farmer and agriculture support (+ 0.3 billion) programs

PHP 1.3 billion liquidated by one province, eight cities, and 58 municipalities as part of the PHP 37 billion one-time Bayanihan grant available to local government units (LGUs)

PHP 0.6 billion worth of additional PhilHealth payments to health care institutions

PHP 14.1 billion of spending by the Department of Health (DOH)

Having previously unpacked the basics, further clarity may be helpful around a few more aspects of the COVID-19 budget.

So far, we have focused on the governments COVID-19 budget across three categories: social amelioration, health, and local government assistance. However, it is critical to highlight that this does not constitute the totality of the governments planned COVID-related spending nor does it capture indirect costs from interventions such as tax exemptions, concessionary loans, or regulatory relief. Rather, it represents the direct spending that is authorized by the first Bayanihan Act to support immediate response and relief efforts.

In April, the Department of Finance (DOF) released the first iteration of the governments larger socioeconomic recovery plan,We Will Rise As One. The still-evolving blueprint is estimated to be worth PHP 1.7 trillion and involves a four-pronged approach:

Pillar 1 Emergency support for vulnerable groups and individuals (PHP 595.6 billion)

Pillar 2 Marshalling resources to fight COVID-19 (PHP 58.6 billion)

Pillar 3 Fiscal and monetary actions to finance emergency initiatives and keep the economy afloat (PHP 856.3 billion)

Pillar 4 An economic recovery plan to create jobs and sustain growth (financed by Pillar 3)

Source: Department of Finance

The PHP 385 billion Bayanihan Act budget is but a subset of this greater spending plan and is encompassed by Pillars 1 and 2. Examples of additional spending that are not included in the PHP 385 billion figure are free online upskilling courses offered by the Technical Education and Skills Development Authority (PHP 3 billion) and a Department of Trade and Industry loan program for micro, small, and medium businesses (PHP 1.2 billion).

Additions are possible, with a second Bayanihan bill that may expand the provisions of its precursor underway.

As the government frees up fiscal space for urgent priorities, it is important to be aware of what we are giving up in the process. How has the 2020 National Budget been reprogrammed to accommodate the COVID response budget? The same question can be asked about future budgetary realignments that may be made by the President using his emergency powers.

Broadly speaking, there are three buckets within the national budget that the government is permitted to tap to generate resources for COVID-19 response efforts under the Bayanihan Act: namely, (a)discontinuedappropriations, (b)continuingappropriations, and (c)unprogrammedappropriations.

At the risk of oversimplification, appropriations can be thought of as Congress-approved budget items that correspond to

(a) budget meant for programs, activities and projects that will no longer be used, (b) budget earmarked for specific projects or purposes

(c) discretionary budget that can be released when revenue collections or foreign funds exceed targets

So far, the total value that has been secured from these three buckets is PHP 350.4 billion. This includes pooled savings across government entities, including national departments, government owned or controlled corporations, and state universities and colleges.

Allotments generated from this budget reprogramming exercise are then reallocated to agencies at the forefront of government response efforts.

Lastly, it is important to stress that reported spending does not necessarily equal real-time spending. What the CCBT team is able to track is mostly limited to the numbers provided by the government. It is possible that actual expenditure is higher than what is reported, if there is a delay in the documentation or release of data. This is likely what happened with the DOH, the bulk of whose spending was only accounted for this week, despite qualitative reports of the agency procuring PPE sets and medical equipment even before June.

Likewise, spending may not necessarily equate to proper disbursement. We cannot discern from the reported spending figures alone if disbursements are going to their highest and best use and if they are reaching their intended recipients. Are we paying fair prices for medical equipment? Are there certain policies or strategies that would deliver greater bang for buck than what is currently being pursued?

Cash meant for social amelioration that is released to LGUs may be marked as disbursed, but there is still a need to validate the veracity of beneficiary lists. These are just some of the considerations that should be kept in mind.

Hence, while the CCBT can give us a general understanding of the rate and breakdown of government expenditure, it cannot tell the full story. To be sure, laws such as thePrice Act(RA 7581) and validation processes of agencies such as the Commission on Audit (COA) and the DSWD exist to prevent the misuse of funds.

Nevertheless, even with such checks in place, we should all be encouraged to seek out and scrutinize data. This not only shows us where our money is going, but that can help us evaluate whether funds are being spent in the best way possible and whether they are indeed going to the people who need them. This entails monitoring both health and socioeconomic outcomes as well as continuously assessing whether government interventions are working as intended. Once spending is fully accounted for, the next step is to ask another important question: Are the high-level reports consistent with whats happening on-the-ground?

To learn more about the status of the governments Covid-19 budget, visitcovidbudget.ph. Raya Buensuceso is a finance and economic analyst atPolestrom, an infrastructure advisory firm that specializes in public-private partnerships. She was formerly a research fellow at the Asia Center of the Milken Institute, a US-based policy and economic think tank, and graduated from Princeton University in 2017.

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Tracking the COVID budget: Second portion meant to aid millions by end of May has not been released - ABS-CBN News