Socioeconomic Planning Secretary Arsenio Balisacan said on Friday that the government will resort to “reallocation” of funds over increasing the country’s deficit despite urgent need for additional funding and support for Typhoon Yolanda (Haiyan) victims and restoration of Visayas region.
Balisacan, who is also the director general of the National Economic and Development Authority (NEDA), told reporters on the Philippine Economic Society’s annual meet that the government is looking at reallocation first before resorting to additional inputs in deficit.
“We are looking for reallocation only so we do not need to increase the deficit. But we can also entertain [the idea]because with this crisis that we are seeing, we really need to get those resources. So if we need to raise the deficit, I think the market would understand that,” Balisacan said.
“Besides, our macroeconomic fundamentals remain strong despite this crisis. I don’t think it would create any problem. But it would be disastrous and costly for our economy, for our social sector and for our people if we don’t get those spending coming in quickly,” the NEDA director general added, citing the urgent need for quick and massive funding in Visayas for the typhoon victims’ relief as well as the region’s rehabilitation.
“The huge number of people there affected, if you don’t have [quick action,]that to me is the most important concern…I don’t think this crisis has affected badly our macroeconomic fundamentals,” he added.
The socioeconomic planning secretary pressed that funding is not a problem, given the support from several countries, multilaterals and development organizations and Philippine embassies all over the world. The concern is really deploying the funds direct to the victims “quickly” and “efficiently” to “minimize social cost of the crisis on our population.”
“Our problem is to really get back the schools as quickly as possible, the hospitals, health clinics and livelihood. Otherwise, these transient poor will now become permanent poor. So that’s what we want to avoid that those who have fallen below the poverty line would be able to get back as soon as possible,” Balisacan said.
He also said that it may take one to two years to build the whole city of Tacloban as well as its neighboring cities in Eastern Visayas, gross domestic product of the country may be robbed off 0.3 to 0.8-percentage points, and that rebuilding may be costly, but he contradicted, saying that immediate relief and increased spending should be of prime action in the area.
“It is very costly [to build a city]…This does not happen overnight. Even if you’re rebuilding an entire city, it could take 1 or 2 years—it is under sequencing. What is the most urgent to do is immediately restore the most basic necessities like power, hospital, schools and other livelihood,” Balisacan said.
“I’m not so much worried about the growth per se. I’m worried about the social implications. The harder part is if a person falls into poverty, it is much harder to get that person back up than an economy missing one quarter of growth. Its effects would be inter generation,” he added, citing the children in Visayas forcibly dropped out from school because of their displacement caused by the supertyphoon.
Balisacan said that the government is projecting a 3-percent to 3.5-percent share of infrastructure spending for next year, which would amount to P6 billion more spending for infrastructure by 2014. He noted that such spending may fuel government’s spending, which can eventually reach targets by next year.
Kristyn Nika M. Lazo