The Philippine government has set aside funds to battle the coronavirus outbreak until the end of May — and has “a lot of headroom” to spend more if needed, the country’s Secretary of Finance Carlos Dominguez said on Wednesday.
The Philippines is the second worst-hit country in Southeast Asia, behind only Malaysia. It has reported 3,764 cases of the coronavirus disease and 177 deaths so far, data compiled by Johns Hopkins University showed.
The government has planned around $23 billion in funding — or around 5% to 6% of its gross domestic product — for health-care and economic efforts, Dominguez told CNBC’s “Street Signs Asia.” He added that the Philippines is planning for a “bounce back” stimulus package to lift the economy out of the damage caused by the pandemic.
“Our original funding was really for two months, that is April and May. While we were not sure how long (COVID-19) will last, we think that conservative estimates would be until around the end of May, so we are ready until the end of May,” he said.
Philippine President Rodrigo Duterte on Tuesday extended strict home quarantine measures in the island of Luzon, where the capital city of Manila is located, until the end of April. Luzon, where half of the country’s 101 million population live, has been subjected to those measures since March 16.
Duterte’s decision led several economists to slash their economic forecast for the Philippines. JPMorgan said in a Tuesday note that it downgraded the 2020 growth forecast for the Philippines to 0.9% from 2.1%.
Dominguez, however, wasn’t as optimistic.
“We are projecting zero to possibly 0.8% negative growth this year,” he said.
“Definitely, businesses are impacted especially businesses in the tourism sector as well as retail sector … our tax collection is definitely going to be a bit lower than our original target but again, as I said, these are things that we can finance,” he said.
The finance secretary explained that the president has the legislative authority to reallocate funds within the government budget to areas that require more money to combat the coronavirus outbreak. The government could also increase its borrowings from multilateral banks and the commercial market, he said.