Undo Cayetano’s bias against workers, Velasco told; Labor group unveils demand for P2-trillion “Worker’s Stimulus”, “Wealth Tax”

Press Release

30 September 2020

Undo Cayetano’s bias against workers, Velasco told

Labor group unveils demand for P2-trillion “Worker’s Stimulus”, “Wealth Tax”

Quezon City – The Bukluran ng Manggagawang Pilipino challenges incoming House Speaker Lord Allan Jay Velasco to undo the “legacy of austerity” and "bias against workers" under the leadership of current House Speaker Alan Peter Cayetano, insisting that “worker’s need a pro-people’s budget more than ever to tide them through the pandemic.”

“Cayetano didn’t have the spine to stand-up against the austerity measures of Sonny Dominguez, who has compelled Batasan to reduce its proposed stimulus package for economic recovery. For them, increasing the budget for the welfare of the workers and the people is not only a losing investment but an unnecessary expenditure”, said BMP Chairperson Leody De Guzman.

Earlier proposals for economic recovery such as the P1.3 trillion Accelerated Recovery and Investments Stimulus for the Economy (ARISE) proposal by Representatives Salceda and Quimbo, as well as the P1.5 trillion COVID-19 Unemployment Reduction Economic Stimulus (CURES) proposal by House Speaker Cayetano, were trimmed down to the P275 billion Bayanihan to Heal as One (BAHO) 1, and the P165.5 billion BAHO 2.

HIGHER 2021 BUDGET

“Representative Velasco should heed the call of the workers for a better 2021 budget, one that does not abandon citizens and taxpayers at this time of need,” insisted De Guzman.

While the 2021 budget proposal which is only 10% higher than 2020’s budget, it reduced the spending of the Department of Health (DoH) from this year’s P181 billion to P131 billion, with only P2.5 billion allotted for CoViD-19. 

Spending for DSWD’s budget is more than halved, while DOLE’s Director Warren Miclat complained to Congress behind that they originally put forward a P76 billion budget but only P27.5 billion is approved for the budget proposal.

“WORKER'S STIMULUS”

BMP demands Velasco to take a look at its proposal for a P2 trillion stimulus package to be spent on 2021, equivalent to 11.6% of the 2019 GDP, which will be on top of regular expenditures of agencies.

“The P2-trillion pesos will be spent according to BMP’s formula for recovery, which can be summed up into 4Ks: Kabuhayan, Kapakanan, Kaligtasan, and Kapangyarihan,” said De Guzman.

BMP demands the following expenditure:

1. Rebuild people’s lost livelihoods (kabuhayan) via a state program of employment guarantee (P400 billion) and subsidy to the small and mirco-enterprises (P500 billion);

2. Protect the welfare (kapakanan) of working class households by testing a new system for universal basic income (UBI) system, starting from the poorest families (P425 billion). 

3. Ensure the health and safety (kaligtasan) of the masses by building a genuinely public health service from the tatters of corrupt and bankrupt PhilHealth and privatized healthcare, starting with paying for all out-of-pocket expenses (P400 billion) and ending the lag in rural healthcare infrastructure (P25 billion). 

4. Give power back to the workers (kapangyarihan) via subsidies to increase the worker’s equity in the firms they work on (P250 billion cost).”

“WEALTH TAX”

To finance the stimulus program, the BMP called on the Velasco leadership to “junk CREATE” and consider a new legislation for “wealth taxes”.

CREATE, or the “Corporate Recovery and Tax Incentives for Enterprises”, will slash corporate income taxes from 30 percent to 20 percent, and will result in P650 billion foregone revenues.

BMP revealed a two-pronged wealth tax proposal. The first one is a one-time corrective wealth levy on the top 50 families as of 2019 (the last normal year) at 25% of their 2019 net worth, expected to yield P1 trillion. 

“Such a one-time levy can be considered as an emergency measure that lets the richest oligarchs in the country share in the burden of reviving an economy destroyed by CoViD-19 pandemic,” said De Guzman. 

BMP argued that “won’t impoverish the billionaires”, revealing that the average increase in the net worth of the Sy family is at 17% per annum from 2007 to 2019, i.e. their net worth quadrupled in just a little over a decade. During the same period, the estate of the Villar family grew seven-fold.

“The second type is a continuing 3% annual levy on the financial wealth of all individuals, expected to yield another P1 trillion,” said De Guzman.

De Guzman insisted that this is fair, given that “average growth rate before CoViD is at 6-7%, and the global average rate of return on capital at 5%”.##

For reference, please contact: Leody De Guzman