Socioeconomic Planning Secretary Arsenio Balisacan said recently that the government will resort to “reallocation” of funds instead of increasing the country’s fiscal deficit, despite urgent need for additional funding and support for Super Typhoon Yolanda victims and rebuilding efforts in the Visayas region.
Balisacan, who is also the director general of the National Economic and Development Authority (NEDA), told reporters on the sidelines of the Philippine Economic Society’s annual meeting that the government is looking at reallocation of funds, before resorting to increasing the fiscal deficit.
“We are looking for reallocation only so we do not need to increase the deficit. But we can also entertain [the idea of increasing the fiscal deficit], 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,” he 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,” Balisacan said, citing the urgent need for quick and massive funding in the 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 said that funding for Yolanda’s victims and the region’s reconstruction is not a problem, given the support from several countries, multilaterals and development organizations, and Philippine embassies all over the world.
“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 rebuild the whole city of Tacloban, as well as its neighboring cities in Eastern Visayas.
“I’m not so much worried about the [gross domestic product]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 that children in the affected areas in the Visayas forcibly dropped out from school because of the effects of the super typhoon.
Balisacan said that the government is projecting a 3-percent to 3.5-percent share of infrastructure spending for next year in the affected areas, which would amount to P6 billion more spending for infrastructure by 2014.