Funding the ERP

In the Medium-term Philippine Development Plan (pdf), the goal was to close the national government deficit by 2010. However, government decided to forego the plan as the global crisis emerged. For 2009, the Development Budget Coordination Committee set the deficit target at PhP102 billion (US$2.2 billion).

The PhP330 billion (US$7 billion) economic resiliency plan is composed of:

 PhP160 billion (US$3.4 billion): amount of the increase in the 2009 budget; this funds small, community level infrastructure projects. For more information on the 2009 budget, contact the Department of Budget and Management.

PhP40 billion (US$851 million): tax cuts for low and middle income earners (PhP20 billion or US$425 billion)) and the scheduled cut in corporate income taxes (PhP20 billion or US$425 million)) as provided in the Revised Value Added Tax Law.

PhP100 billion (US$2.1 billion): large infrastructure projects funded by government financial institutions, social security institutions and private commercial banks. The system is currently awash with liquidity coming from Filipino businessmen who are bringing back their money after divesting from unstable foreign banks. Money lent by government financial institutions and social security institutions are seen to provide safe but attractive returns.

PhP30 billion (US$638 million): additional benefits to members by social security institutions. This will be taken from the gap between contributions and claims/benefits.

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