Government eyes P3-trillion borrowings in 2021

THE government is eyeing to borrow P3 trillion next year in order to fund more than half of its spending plan and plug the ballooning deficit, Finance Secretary Carlos G. Dominguez III said on Thursday.

“For 2021, we expect to borrow roughly P3 trillion, roughly the same as what we (plan to borrow) in 2020,” he said in an online press briefing on Thursday.

This represents 66.67% of the P4.506-trillion proposed budget ceiling for next year.

The P3-trillion borrowing plan this year makes up 69% of the

P4.34-trillion budget, and nearly three times higher than the P1.02 trillion raised for full-year 2019.

“Our borrowing plan is in place and definitely, it is sufficient to cover our needs this year and next year,” Mr. Dominguez said, noting that the government’s programmed borrowings will be reduced to P2.3 trillion in 2022.

The government will also maintain a 75:25 borrowing mix ratio, in favor of domestic sources to minimize foreign exchange risks and volatility, he added.

National Treasurer Rosalia V. de Leon said the Bureau of the Treasury will exhaust conventional methods in raising funds to plug the ballooning deficit this year.

“As we have been planning, there’s also some discussions with the Bangko Sentral (BSP) that we would be also tapping some of their facilities, which we have already started with the P300 billion advances that the BSP has provided to the Philippine government,” Ms. De Leon said during an online economic forum on Thursday, referring to the central bank’s purchase of government securities through a repurchase agreement in April.

During a July 28 meeting, the economic team projected a wider budget deficit from 2020 to 2022 as the government plans to spend more to pumpprime the economy while tax collections slump amid the downturn. —