House Committee on Ways and Means chairperson and Appropriations vice chairman Albay Rep. Joey Salceda confirmed the approval of the bicameral conference committee today the P4.5 trillion 2021 General Appropriations Act (GAA).
“The ball will be in the President’s court early, so there is almost no risk that we will face a delayed budget enactment this year. That can only mean well for 2021 economic recovery,” Salceda said.
“The early passage of the 2021 GAA, along with the expected adoption of CREATE by the House later today, will be strong foundations of our 2021 bounceback. With these reforms done, we can focus on economic relief and the vaccine rollout,” the solon added.
Enhanced infrastructure spending, ‘new economy’ items
Salceda said the budget reflected an around P300 billion increase in infrastructure that he sought from the economic managers during the early days of the COVID-19 crisis.
“I had conversations with the economic managers. We came up with four agreements. First was an increase for infra spending by around P275 billion. That materialized. Second, the rollout of credit measures that will activate P551 billion in credit stimulus. Third, to set 9.0% as the growth target for 2021. And fourth, to have a third or even fourth stimulus package,” Salceda said.
“This was a conversation we had in April. In retrospect, that conversation was prescient. Government should have been more aggressive with encouraging credit and bridging borrowers with lenders. We should still push for another round of economic relief. And we should not concede the growth targets for next year,” he added.
Apart from P1.1 trillion for infrastructure, the 2021 budget also includes P7.6 billion in additional spending for adapting to the post-COVID life, including items on telecommunications enhancements. The budget also includes P203 billion for healthcare.
Salceda to tackle deficit management for 2021
The 2021 budget deficit is expected to be at 8.5% of GDP, although Salceda says this can still be narrowed.
“The actual budget deficit ultimately depends upon how fast we spend, how quickly the economy recovers, and how well we collect revenues. We cannot slow down spending during the recovery. It is vital that we spend quickly. But, we can make collection more efficient,” Salceda said.
“A chair of the House tax committee, I will continue to exercise oversight of the Department of Finance and the revenue agencies. Our partnership has been extremely successful. My term as Ways and Means Chair is likely to come down as having passed the most revenue-raising laws in the history of the Fifth Republic. The revenue agencies have also posted all-time-highs last year, and are continuously beating their revised revenue targets despite the pandemic,” Salceda added.
Salceda says that his committee has measures worth P651 billion in revenue-raising potential that could be enacted immediately but imposed post-2022.
“We can postpone the effectivity of new revenue measures to after the recovery, but I am confident that these will be priced into our credit ratings nonetheless. So, we should be fine,” Salceda remarked.
“The trap is to think that once life resumes normalcy in 2021, we should return to some austerity. I disagree. We will expand fiscal space, but we will continue to spend on public goods for the people,” Salceda concluded.