Republic of the Philippines
HOUSE OF REPRESENTATIVES
Queson City

NINETEENTH CONGRESS
First Regular Session

271

HOUSE BILL NO.

Introduced by HON. LUIS RAYMUND “LRAY” F. VILLAFUERTE, JR.,
HON. MIGUEL LUIS R. VILLAFUERTE, HON. TSUYOSHI ANTHONY
HORIBATA AND HON. NICOLAS ENCISO VIII

The evident devastating effects of the Covid-19 pandemic along with the
implementation of preventive measures intended to curb the viral transmission
between localities which included months-long suspension of major business
activites and the emergence of hybrid work arrangements have significantly
decreased the growth rate of the Philippines too -9.5% and 5.6% in 2020' and 2021*
respectively. The recovery of the Philippine economy will ride on the back of
sustained government spending across all sectors with a focus on new private and
public infrastructure works that will be propelled by the administration of President
Ferdinand Romualdez Marcos Jr. with the “Bansang Babangon Muli’ flagship

program.

According to the Philippine Institute for Development Studies (PIDS), weaker global
and domestic demand in the pandemic affected months has cost the Philippine
economy between PHP276.3 billion under best-case scenarios and PHP2.5 trillion
under worst-case scenarios with the transport, storage, communication, services,
tourism, and wholesale and retail trade sectors recorded substantial losses’. PIDS
notes that due to self-isolation and community quarantine guidelines, the ability of
workers to participate in the labor market is directly affected.

* Philippine Statistics Authority. (2021, January 28). The Philippines posts -8.3 percent in the
fourth quarter of 2020; -9.5 percent for the full-year 2020(Press _ release]
https://psa.gov. ph/content/philippine-gdp-posts-83-percent-fourth-quarter-2020-95-percent-full-year-
2020

? Philippine Statistics Authority. (2022, January 27). The Philippines posts 7.7 percent in the fourth
quarter of 2021; 5.6 percent for the full-year 2021 [Press release]. https://psa.gov.ph/contentigdp-
Bosted-growth-77-percentfourth-quarter-2021-resuling-B6-percent-ful-year-growlh-2021



Community Quarantine (ECQ)‘ back in April 2020. Many of these workers have gone
back to their provinces with no stable jobs and sources of livelihood

In addition to locally displaced workers, the Department of Foreign Affairs (DFA) has
reported numerous repatriated Overseas Filipino Workers (OFWs). According to the
DFA, at least 19,466 OFWs have returned to the Philippines with at least 200,000
more having decided to come home due to the global pandemic’.

In the face of global recession and unemployment, it is incumbent upon the
government to establish recovery interventions that would simultaneously support
Filipinos in the immediate term while laying out the foundations for a more resilient
and sustainable future.

With various government and other public figures in the country and abroad likening
‘ongoing efforts to curb the Covid-19 pandemic to that of a “war” (albeit, against an
invisible enemy), socio-economic circumstances that arose from communities
emerging out of Covid-19 lockdown or quarantine measures may be similarly
compared to "post-war" rehabilitation and recovery.

The annals of history and economic theory point to key paradigms for insights and
critical adoption, if not, modification or innovation suited to the present challenges.

During the Great Depression Era in the 1930s, particularly in the United States, the
insight from economic theory that government spending and interventions in the
market economy could stimulate demand and spur growth guided American New
Deal policies and European welfare state models. In the United States, for example,
the Civilian Conservation Corps (CCC) established by the US Congress on March
31, 1933, provided jobs for millions of, unemployed during the Great Depression
Working in forest management, flood control, and conservation projects,
development of state and national parks, forests, and historic sites, the hired men
and women of the CCC were paid US$30.00 a month and were required to “remit” a
substantial part of their earnings to their homes and families to stimulate local
demand and consumption’.

Insights from the New Deal Era were carried into the Post-World War Il economic
recovery policy-making interventions. In 1948, the United States Congress passed
the Economic Cooperation Act of 1948, popularly known as the Marshall Plan
appropriating funds for the recovery of war-torn European nations and other
countries damaged by the Second World War. The Marshall Plan would go on to
assist government authorities in bankrolling public infrastructure programs among
others to create jobs and employ workers, stimulate domestic economies, and build
trade linkages worldwide. On the American domestic front, the US Congress enacted

* Over 1 million construction workers stranded, displaced due to Luzon lockdown

Maan Macapagal, ABS-CBN News Posted at Apr 18 2020 03:17 AM https:/inews.abs-

con. com/news/04/18/20/over-1-million-construction-workers-stranded-displaced-due-to-luzon-
lockdown

° Almost 20,000 OFWs evacuated, thousands more to be repatriated amid COVID-19 — DFA.
Ratziel San Juan (Philstar.com) - April 25, 2020 - 1:05pm.

https://www. philstar.com/headlines/2020/04/25/2009733/almost-20000-ofws-evacuated-thousands-
more-be-repatriated-dfa

° if the Great Depression Is Any Indication, Things Won't Just Go Back to ‘Normal’ After the
Coronavirus Pandemic Ends. James C. Cobb. April 27, 2020. https//time.com/5827348/great-
depression-coronavirus-after!


the 1965 Public Works and Economic Development Act” which increased public
spending to strengthen public infrastructure and address growing unemployment.

A similar law — Republic Act No. 3466 or the Emergency Employment Act of 1962 ~
was enacted by the Philippine Congress creating an Emergency Employment
Administration mandated to implement large-scale public works projects which
included power development, national and communal irrigation systems, river
control, and drainages, and the construction of highways and feeder roads
connecting agricultural communities to market centers,

In contemporary times, the global recession of the late 2000s arising from the US
subprime mortgage crisis drew policy-makers attention once more to the role of the
government in economic recovery and in particular, the contributions of public
infrastructure spending. In the US Congress, policymakers and experts argued
during debates leading to the passage of the American Recovery and Reinvestment
Act (ARRA) that infrastructure investment "can be an important source of stimulating
labor demand when the labor market is underutilized, and enhancing U.S.
productivity through long-neglected investments in roads, bridges, water systems,
ports, etc. Signed into law by then-President Barack Obama in February 2019,
impact assessment studies on the ARRA suggest that it contributed substantially to
real GDP growth and jobs creation - arresting the nearly 700,000 jobs per month
losses in the American economy before its implementation and creating around 6
million employment-years (one employment year is equivalent to one payroll job for
one year)’. But the present unemployment arising from COVID 19 under the
incumbent President Donald Trump's Administration is more than 20 million asking
for unemployment insurance claims and still counting

Although the Philippine economy rode out of the global recession of the late 2000s
with flying colors, the government under the leadership of then-President Gloria
Macapagal-Arroyo remained proactive and uncomplacent in protecting Filipino
workers and guaranteeing the availability of employment. In 2009, Arroyo's
Economic Resiliency Program (ERP) ordered the hiring of some 93,000 unemployed
Filipino workers for the implementation of a roadside maintenance program’?

‘The lessons of economic policy and history appear clear: infrastructure spending
by the government “directly increases employment because workers are hired
to undertake construction projects. It also adds to demand for goods and
services through purchases of material and equipment and additional
spending by the extra workers who are hired ... that increase in demand leads
to further hiring”''. Experts call this the cumulative or multiplier effect that
infrastructure spending beneficial to econo ery. The Bansang
Babangon Muli bill to be introduced under the Administration of President

’ The Public Works and Economic Development Act Of 1965 — A Domestic Marshall Plan.
Monroe Karasik. The Business Lawyer. Vol. 22, No. 3 (April 1967), pp. 617-624
° The Role of Public Works Infrastructure in Economic Recovery. Claudia Copeland, Linda
Levine, William J. Mallett. Congressional Research Service. September 21, 2011
https://fas.ora/sgp/crs/misc/R42018.pdf
° The Economic Impact of the American Recovery and Reinvestment Act of 2009 Ninth
Quarterly Report.

hitps /lobamawhitehouse archives gov/sites/defaultfles/docs/cea_9th_arra_report_final_paf pdf

° Emergency job programs to hire 93,000 workers. Paolo Romero - November 2, 2009 - 12:00am

httos:/mww.philstar.com/headlines/20 102/519308/emergency-job-program-hire-93000-workers
™ Copeland, et. al, page 24



Ferdinand Romualdez Marcos Jr. will provide a significant stimulus for accelerated
economic recovery.

But while post-wartime or post-economic downturn policies can serve as a guide, the
uniqueness and distinctiveness of the post-Covid-19 lockdown situation and the
“new normal’ measures that must attend it also provide new pathways that
government local infrastructure spending can take towards a more robust and
resilient national economy. As an insightful policy blog from the International
Monetary Fund (IMF) puts it, “the fall of output in this crisis is not driven by demand:
it is an unavoidable consequence of measures to limit the spread of the disease” and
therefore, the role of economic policy is not simply that of stimulating aggregate
demand”

The present legislative proposal contained under this Bill draws from past lessons
but situates them considering our contemporary needs.

Under this National Economic Stimulus and Recovery Act of 2022, government
infrastructure spending shall be primarily geared towards maximizing the direct and
indirect creation and sustaining of jobs, particularly in the Philippine rural
countryside. Anchored on the premise that in the “construction phase of
infrastructural projects like roads, watershed development, construction of irrigation
dams, or powerhouses, the poor are provided employment and income-earning
opportunities”’, the measure will prioritize the funding of projects that target
infrastructure building down the most basic unit of the political structure - the
barangay level. These huge infrastructure projects shall be undertaken in
conjunction with the “Balik Probinsiya Program” recommended by Senator
Christopher Lawrence “Bong” Go which was approved by President Duterte.

These areas for immediate funding shall be prioritized - Health, Education,
Agriculture, Local Roads/Infrastructure and Livelihood (HEAL) with proposals
for financing evaluated against criteria based on 1) actual need in the locality; 2) the
number of locally sourced new jobs to be created and/or sustained after the
construction of the infrastructural output; and 3) potential for forward and backward
linkages with local businesses, suppliers and traders, small and medium enterprises
and skilled and unskilled workforces. By refocusing government interventions on
these areas, the BBM Act of 2022 also aims to rectify inequities in critical
infrastructure funding. Moreover, it lays the necessary groundwork for the
implementation of urban decongestion policies (part of the Balik Probinsya Program),
the absorption of workers returning home to the countryside through entrepreneur
development projects, and the eventual eradication of rural poverty in areas that will
benefit the most from the positive socio-economic impact of public development
projects. The implementation of the “Balik Probinsiya Program” shall be further
incentivized by tax and non-tax measures such as new or expanded roads that lead
to the opening of new business districts, and economic and tourism zones

" Economic Policies for the COVID-19 War. Giovanni Dell Ariccia, Paolo Mauro, Antonio
Spilimbergo, and Jeromin Zettelmeyer in IMF Blog Insights and Analysis on Economics and Finance.
https://blogs..imf.org/2020/04/01/economic-policies-for-the-covid-19-war!

*° Evaluation of Infrastructural Interventions for Rural Poverty Alleviation, 2000 Economic and
Social Commission for Asia and the Pacific (ESCAP)

https:/www. unescap org/sites/defaultfiles/Rural_Poverty_fulltext pdf



Infrastructure shall be the backbone of our economy following the insight of
almost all respected economists and recognized policymakers. Therefore, although
palliative measures such as cash transfers, unemployment dole-outs, relief, and
other forms of immediate amelioration support are undoubtedly necessary now, it is
in the interest of the government, the private sector, and the Filipino people at large
that a lasting cure for economic resilience be established.

In view of the foregoing, the immediate approval of this bill is most earnestly sought.

\

“LRAY” F. VILLAFUERTE, JR. MIGUI IS R. VILLAFUERTE

SHI ANTHONY G. HORIBATA NICOLAS ANCGS0 VIII



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

NINETEENTH CONGRESS
First Regular Session

HOUSE BILLNo. 271

Introduced by HON. LUIS RAYMUND “LRAY” F. VILLAFUERTE, JR.,
HON. MIGUEL LUIS R. VILLAFUERTE, HON. TSUYOSHI ANTHONY
HORIBATA AND HON. NICOLAS ENCISO VIII

AN ACT ESTABLISHING NATIONAL ECONOMIC STIMULUS AND RECOVERY
FUND, INSTITUTING MECHANISMS FOR THE IMPLEMENTATION THEREOF
AND APPROPRIATING FUNDS THEREFOR

Section 1. Title. - This Act shall be known as the "The BANSANG BABANGON
MULI (BBM) Act of 2022".

Section 2. Declaration of Policy. - Infrastructure in various socio-economic sectors
is the backbone of the country’s economy. The economic downturn and
unemployment brought about by restrictive lockdown measures implemented by the
Philippine government during the height of transmission of the Covid-19 virus among
Filipinos, it is the declared policy of the State to develop more stimulative measures
and implement interventions that will create new jobs, protect existing employment-
generating activities, and promote the equitable distribution of resources towards the
eradication of poverty and the integral inclusive development of the Filipino people
as the nation starts to recover from the global pandemic.

Thus, there is an urgent need to: a) establish a Special Fund that shall be disbursed
primarily for the implementation of infrastructure projects across these priority
areas - Health, Education, Agriculture, Local Roads/Infrastructure and
Livelihood, Information and Communication Technology, and Tourism (HEAL
IT); b) define the guidelines, criteria, and standards in accessing, implementation,
and evaluation of use of the same fund; and ¢) establish the government authority
and body which shall be responsible for the collection, evaluation, approval, and
oversight of the projects and activities to be undertaken under the same fund

Section 3. Appropriation, Automatic Release and Fund Availability. - The
amount of One Trillion Five Hundred Billion Pesos (PHP 1,500,000,000,000.00) is
hereby appropriated for the establishment of the NATIONAL ECONOMIC
STIMULUS AND RECOVERY FUND (Recovery Fund).


The budgetary requirements for projects approved for implementation under the
Recovery Fund shall be automatically released to the implementing unit in order
to facilitate the start-up and completion of projects and removing existing regulations
and issuances that would impede the same

Appropriation for the Recovery Fund shall be made available as they are hereby
appropriated for three (3) fiscal years from the approval of this Act under the
following schedule: five hundred billion pesos (PHP500,000,000,000.00) on the
first year, five hundred billion pesos (PHP500,000,000,000.00) on the second
year, and five hundred billion pesos (PHP500,000,000,000.00) on the third year.
After three years, Congress shall enact legislation extending or modifying the same
or terminating the Fund. In the latter case, the unobligated balance shall be made
available for the general budgetary requirements of the year succeeding its
termination.

Section 4. Eligibility. - Infrastructure projects under the priority areas (HEAL IT -
Health, Education, Agriculture, Local Roads/infrastructure and Livelihood,
Information and Communication Technology, and Tourism) shall be
implemented through the Fund provided that a project to be eligible shall be located
in an area that on the date of the submission of the application by the designated
department or agency of the National Government authorized to receive, screen and
evaluate the project for implementation shall meet the priority guidelines for the fiscal
year under consideration by the Executive Cluster Committee established under this
Act.

4.1. Implementing Units - The implementation of projects under Recovery
Fund shall be undertaken by national government departments /
agencies authorized by law or their charter to implement such class of
projects. Such departments/agencies may, however, enter into a
Memorandum of Agreement with a local government unit provided that
said local government unit possesses the capacity to implement and
maintain the same after construction.

4.2. No project shall be approved for implementation under the Recovery
Fund unless the proponent can demonstrate that actual work on the
same can realistically commence within a period of 90 working-days
from the release of the Special Allotment Release Order (SARO) from the
Department of Budget and Management).

Section 5. Project Classes. Infrastructure projects to be funded under this Act shall
primarily be for construction (and related activities, e.g. repair. improvement, etc.)
purposes but may include the procurement of the necessary and essential
equipment and implements for the operations of the same. No money shall be paid
out of this fund for the payment of personnel services, job order salaries,



professional and consultancy fees, the conduct of trainings, seminars, sports and
cultural activities, of the Local Government units where the projects are located.

5.1, Health-Related Projects to be funded through the Recovery Fund shall
prioritize the following

construction’ improvement /expansion of barangay or municipal health
centers, or the procurement of start-up equipment and supplies for new
existing facilities under this class;

»

s

construction/ improvement/expansion of Municipal or City Health clinics,
hospitals, and other facilities or the procurement of start-up equipment
and supplies for new / existing facilities under this class;

. construction / improvement /expansion of Provincial and District Hospitals
and Municipal Health facilities and the procurement of equipment and
supplies for new/existing facilities under this class;

2

construction of testing centers and isolation facilities for communicable
diseases and additional intensive care units at local hospitals;

a

. construction of wastewater or sewage treatment plants or disposal
facilities to minimize chemical and microbial hazards associated in
human and hospital waste.

9

6.2. Education-Related Projects to be funded through the Recovery Fund
shall prioritize the following construction’ expansion improvement of
school buildings and classrooms to decongest school facilities

a. construction of washing and sanitation areas, toilets in every school

b. construction/repair/improvement of other school facilities for industrial
arts, culinary services, libraries, covered courts, ete.

¢. construction/repair/improvement of youth civic centers, gymnasium,
and sports or athletic facilities;

d. construction/improvement or expansion of technical-vocational learning
centers and the procurement of equipment and supplies for the
operations of facilities under this class; and

5.3, Agriculture-Related Projects to be funded thru the Recovery Fund shall
prioritize the following:



a. construction/repair/improvement of municipal, provincial fish ports or
docks (with ample space that could support social distancing for direct
buyers) and their connecting road/access networks and other
necessary buildings/ attached facilities or equipment for use therein;

b. construction/repair/improvement of post-harvest facilities (including
cold storage facilities, fish landing for aqua-fisheries, meat processing
and packaging centers for commercial distribution, etc.) and the
procurement of farming machinery or equipment and fishery equipment
(motorized fishing vessels, gill nets, etc.) for facilities and activities
under this class;

cc. construction/repair/maintenance of municipal /provincial livestock
facilities, hatcheries, fish nurseries, and other aqua-fishery facilities;

d. construction/repair/ improvement of barangay/ municipal/city/provincial
trading (bagsakan) centers, food terminals, and/or satellite markets
following a floor plan that allows social distancing;

e. construction/repair/improvement of municipal/city/ provincial abattoirs
and hazard free packaging facilities:

f. construction/repair/improvement of barangay/municipal/ provincial
agricultural training centers, nurseries, and other agri-fishery research
and development facilities;

g. construction/repair/improvement of drainage and irrigation systems for
flood-prone agricultural areas;

h. construction or acquisition of more modern fishing vessels for
cooperatives and fabrication of more fishnets, and other agri-fishery
implements; and

i. construction of alternative livelihood facilities for agricultural workers
that would involve processing economically significant agri-business
output.

5.4. Local Roads/infrastructure and Livelihood Projects to be funded
through the Recovery Fund shall prioritize the following:

a. construction or expansion of farm-to-market roads with adjoining solar
drying pavements to facilitate transport of goods and supplies.

b. construction /improvement / expansion of provincial, municipal or
barangay roads affecting vulnerable communities:


construction /improvement /expansion of local roads (provincial,
municipal and/or barangay), roads, and other networks connecting
schools, state-owned universities and. colleges and government-
operated community colleges to communities;

construction/repairimprovement of local roads (provincial, municipal
and/or barangay) connecting communities to health facilities (hospitals,
testing centers, reserved quarantine and isolation facilities, etc.);

construction of provincial, municipal and/or barangay new road
openings; and

construction of walking or bicycle lanes projects and construction of
bridges across creeks or irrigation canals.

construction of evacuation centers and disasters emergency facilities.

construction, expansion or improvement roads /pedestrian lanes in
provinces outside National Capital Region (NCR) that go to tourist
facilities, beach areas or mountain parks and/or roads going to new
business districts, new economic zones or MSME business hubs.

the implementation of an Enhanced Sustainable Livelihood Program
under the Department of Social Welfare and Development (DSWD).

the implementation of an Enhanced Tupad Program under Department
of Labor and Employment (DOLE)

the implementation of the proposed Barangay Emergency Employment
Program (Beep) under DOLE to generate employment and mitigate
unemployment due to COVID-19 and ensure income for formal and
informal sectors during the post-COVID-10 recovery stage

the establishment of access to credit and financing for Small and
Medium Enterprises (SMEs)

the establishment of Research and Development (R&D) programs for
product development and enterprise diversification

building/construction of integrated agricultural processing facilities for
high-value agricultural products



0. the building/construction of production hubs and local livelihood
product marketing and trading centers to improve trade linkages and
partnerships

p. the enhancement of human resource capacity such as Technical
Vocational Training and Education and the construction of training
centers and knowledge transfer facilities.

5.5 Information and Communication Technology Projects to be funded
through the Recovery Fund shall prioritize the following:

a. purchase of IT equipment or laboratory facilities to enable immediate
coordinated health response to suppress transmission of contagious or
communicable diseases, information exchange, and contact tracing;

b. purchase of equipment to upgrade hospital records into an electronic
health records system

c. infrastructure investment for “telehealth” services, e-prescriptions, and
mobile or remote access to health records:

d. purchase of cloud-based platforms for clinical data analysis,
management, and consolidation:

e. construction/repair/improvement of alternative learning centers, including
E-Learning System classrooms and the procurement of equipment and
supplies for the operations of facilities under this class;

f. the establishment of digital infrastructure (IT facilities, IT hubs) in any
public educational, training, or learning institution and the procurement of
equipment and supplies that will facilitate Electronic Learning / Remote or
Distance Learning in the localities.

5.6 Tourism Projects to be funded through the Recovery Fund shall prioritize
the following:

a. construction of Tourism Roads Infrastructure (Access Roads Leading to
Declared Tourism Destinations)

b. construction of Airports, Seaports, and Railway Stations including Access
Roads

Section 6. The National Economic and Stimulus Recovery Fund Executive
Cluster Committee. An Executive Cluster Committee is Hereby Established for the
Purpose of Formulating Guidelines in the Administration of the Recovery Fund and

aT



the Designation of the Executive Department or Agencies that shall Receive
Applications, Screen and Vet and Process for Implementation projects authorized

under this act.

a. Composition of the Executive Cluster Committee (or their duly

authorized representative:
Chairperson -

Vice-Chairs

Members

Secretariat

Secretary of the Presidential

Adviser for Flagship Programs
and Projects

Secretary of Public Works &

Highways
Secretary of Finance
Secretary of Health

Secretary of Education
Secretary of Agriculture
Secretary of Trade and
Industry

Secretary of interior and Local
Government

Secretary of Tourism
Director-General of the
National Economic
Development Authority

b. Roles and Responsibilities of the Executive Cluster Committee

within 15 days from the approval of this Act, the Recovery Fund
Executive Cluster Committee shall convene to formulate its
Implementing Rules and Regulations (IRR) which shall include
among others, if deemed necessary, the standard formula
calculating the multiplier effect of the infrastructure project
to be implemented considering its effects on local employment
and job creation as one of the primary screening factor in project

selection and approval,

ii, the Executive Cluster Committee shall establish and maintain an
Open and Publicly Accessible Online Portal through which
projects funded out of this Act may be monitored;

iii, the Executive Cluster Committee shall, pursuant to the eligibility
criteria established in this Act and further specified in the
subsequent IRR and using the formula adopted, approve priority
areas for funding consideration, including the projects which
may be implemented therein based on the most advantageous
to local employment and job creation as determined by the

adopted formula;



iv. the budgetary requirements for the implementation of approved
projects under the Recovery Fund shall be automatically
downloaded to the accounts of the implementing departments/
agencies with the implementation and use of the same subject
to usual government audit regulations;

Section 7. Reporting Requirement. — The Executive Cluster Committee shall
periodically compile all the reports of the implementing departmentagencies
including the projects implemented by or through local government units and shall
submit within 25 days at the end of every semester, a semestral report of the status
of the projects to the office of the President of the Republic of the Philippines and to
the Congress of the Philippines through the office of the Senate President and the
Speaker of the House of Representatives

Section 8. Separability Clause. — If, for any reason or reasons, any part or provision
of this Act shall be declared as unconstitutional or invalid, the other parts or
provisions hereof which are not affected thereby shall continue to be in full force and
effect,

Section 9. Repealing Clause. — All provisions of existing laws, orders, rules and
regulations or parts thereof which are in conflict or inconsistent with the provisions of
this Act are hereby repealed, amended or modified accordingly.

Section 9. Effectivity. — This Act shall take effect immediately upon its publication in
the Official Gazette or in at least two (2) newspapers of general circulation in the

Philippines

Approved,