The Department of Budget and Management (DBM) has released P20 billion for Bangko Sentral ng Pilipinas (BSP) mandated equity infusion on Wednesday.

President Benigno Aquino 3rd recently approved P32.29 billion in quick-disbursing priority programs and projects that are expected to bolster domestic economic growth in the remaining days of 2012 as well as in the first few weeks of 2013.

Budget Secretary Florencio Abad said that these programs and projects will be funded by P28.9 billion in savings that were incurred from unreleased 2011 and 2012 appropriation as well as P4.4 billion in remaining windfall revenues (Unprogrammed Fund) from dividends by government-owned and -controlled corporations (GOCCs).

He noted that of this amount, P20 billion will be infused by the national government into the authorized capital stock of Bangko Sentral ng Pilipinas (BSP). With P30 billion already released by the Aquino Administration on top of the P10 billion that BSP received way back in 1996, the national government only needs to cover a remaining P10 billion of a total P50 billion authorized capital stock under the New Central Bank Act of 1993, or Republic Act 7653.

Abad said that it is only under the Aquino Administration that the central bank received bulk of its legally mandated equity infusion from the national government. With this fresh capital, BSP will be able to recuperate its losses from stabilizing the currency. Moreover, it is high time for the national government to acknowledge the much-needed contribution of the central bank to macroeconomic stability, particularly its excellent management of the monetary and fiscal environment. With better-than-expected revenue collections this year as well as savings from the discontinuation of slow-moving expenditure items, the government is able to create a fiscal space of P32.29 billion that can be used for urgent expenditures, Abad said.

“This will be used for programs and projects that will sustain macroeconomic stability, accelerate infrastructure development, bolster tourism, support reforms in local governments, and upgrade defense capabilities, among others,” he added.

A stronger and more adequately capitalized BSP is needed in order to sustain the stable macroeconomic and investment climate, especially as the country is looking forward for an investment-grade credit rating by next year, Abad said. Abad also said that this new capital infusion will allow the central bank to expand its rediscounting facility and help stimulate economic activity by enhancing the delivery of credit to the private sector, particularly micro, small and medium-scale enterprises.

The economic manager believes that accelerated government spending will continue to bolster economic growth, as exhibited in the first three quarters of this year.

“With these new expenditure items as well as the new policies we introduced in the 2013 General Appropriations Act, we are confident that the pace and quality of government disbursements this year will be sustained in 2013,” Abad said.

“In particular, with the reforms put in place by the Aquino Administration, we expect infrastructure projects to be implemented not only faster but also at the right cost, with the right quality and with maximum impact to the economy,” he added.