LAST week’s timely transmittal of the 2021 proposed national budget of P4.506 trillion from the House of Representatives to Senate is welcome.
Verification of the budgeted income by Senators is necessary. Of course, there will be a substantial budget deficit. But by how much? Are the projected incomes from taxes and duties realistic?
It is vital to calculate the debt to gross domestic product (GDP) ratio. This understandably, has already risen from approximately 40 percent in the immediate pre-pandemic era to over 50 percent now. What will it be at the end of 2021?
Senators, particularly Senator Drilon, will be concerned as to whether the budgets of the Department of Labor and Employment (DOLE) and the Department of Social Welfare and Development (DSWD) are sufficient to cover financial assistance for workers and poor families affected by the pandemic. A success story of president Duterte’s term is the significant alleviation of poverty between 2016 and 2019. Sadly, many have slipped back into straitened circumstances due to the pandemic and the next assessment of poverty due in 2022 will probably show little or no improvement over 2016.
Banks are in the front line when it comes to the deleterious effects of COVID. BDO, which is gratifyingly transparent about its delinquency problem on loans, has provisioned P23.83 billion from January to September this year compared with ‘only’ P4.25 billion for the same period in 2019. It warns that the worst is yet to come. 2021 will see more loan delinquencies than this year.
Meanwhile, BSP Governor Benjamin Diokno bemoans the fact that only 25 percent of Filipinos have investments, and this proportion is growing only slowly. (It was 23 percent in 2017).
It is understandable, however, that those who are living on a tight budget are uneasy about entering into the investment market, with its attendant risks, under current conditions.
To encourage small savers, BSP has recently allowed trust companies to distribute their unit investment trust funds offering through third parties. Will BSP take the necessary precautions to ensure that these third parties will operate with the necessary probity? We need better consumer protection against the sharks and it ill-behooves BSP to tell us what to do if it does not take responsibility for any misconduct.
The transfer of education from schools to the home has consequences. Some are beneficial. It is now being seen by many parents that schools are not always the happy places that we are led to believe. Many students are probably making more progress at home than they were at school.
On the financial side families are finding that telecommunications costs are becoming a more significant proportion of their budget than before.
I hope social amelioration programs will take into account that shouldering PLDT/Globe’s monthly bills would in some homes make the difference between a good and a limited education./PN
