Recto: Utilizing Unused Funds Will Significantly Boost Economic Growth

Finance Secretary Ralph Recto emphasized the potential economic benefits of tapping into unutilized funds allocated for unprogrammed projects, such as those under the Philippine Health Insurance Corp. (PhilHealth), during a Post-SONA forum in Pasay City. According to Recto, this strategy could significantly boost the country’s GDP and create numerous jobs.

The Department of Finance (DOF) conducted a cost-benefit analysis, revealing that using these idle funds could increase GDP by at least 0.8% and generate approximately 600,000 direct and indirect jobs. This would aid in achieving the government’s growth target of 6.0% to 7.0% for the year.

Economic Impact

“If you implement the unprogrammed, the study I saw is at least a potential increase of 0.8% of GDP and creation of roughly 600,000 jobs direct and indirect,” Recto explained. He believes this could help achieve a 6.5% growth rate, which aligns with the government’s target range.

Last week, the DOF defended its decision to use unused and idle funds from government corporations, arguing it was a more prudent approach compared to borrowing or imposing new taxes to finance projects.

Legal and Strategic Considerations

Recto assured that the DOF’s actions were in accordance with directives from Congress and had been vetted by the Governance Commission for GOCCs (GCG), the Office of the Government Corporate Counsel (OGCC), and the Commission on Audit (COA).

“It is very important to use the unprogrammed fund because this covers, for example, foreign-assisted projects of the President,” Recto noted. He warned that not utilizing these funds could lead to delays, opportunity costs, and unnecessary interest payments on idle projects.

Current Utilization and Future Plans

Stakeholders recently highlighted that approximately PHP 89.9 billion in excess funds from PhilHealth had been redirected to fund appropriations for this year. Out of this amount, only about PHP 20 billion has been transferred to the national treasury, with the remainder to be released on a staggered basis.

Recto disclosed that there are about PHP 117 billion of unused funds with the Philippine Deposit Insurance Corp. (PDIC), bringing the combined total of idle funds to around PHP 200 billion.

“Is it right that the funds are just sleeping, or we can use them for national development, with the large expenditure needs that 115 million Filipinos need or desire?” Recto questioned, advocating for the optimal use of these resources to support national growth and development.

Moving Forward

The DOF intends to continue leveraging these unutilized funds to support key projects and stimulate economic growth. This approach is seen as a crucial step in addressing the country’s expenditure needs and fostering a more robust economic environment for its citizens.