Phl eyes P436-B foreign loans for COVID response
The Philippines is eyeing to secure P436.9 billion in official development assistance (ODA) from multilateral agencies this year to augment funds for coronavirus disease 2019 (COVID-19) response efforts, the Department of Finance (DOF) said yesterday.
In a radio interview with dzBB, finance Assistant Secretary Antonio Lambino said the foreign borrowings is targeted to increase to P436 billion this year due to the COVID-19 crisis.
“Our debt has increased this year because we are fighting COVID-19. We were not able to budget this fight because the whole world was taken by surprise by the COVID-19 pandemic,” he said in Filipino.
Sought for clarification, Lambino told The STAR that the P436.9-billion target is expected to come in the form of ODAs from multilateral agencies and other bilateral partners. It does not yet include borrowings from the offshore commercial debt market.
This is part of the Duterte administration’s four-pillar socioeconomic strategy against COVID-19.
Despite the increased borrowings, Lambino assured the public that the country is not being buried in debt because of the health crisis.
He reiterated that the Philippines is in a good fiscal position, with a debt-to-gross domestic product (GDP) ratio of 39.6 percent as of end-2019.
Lambino said the country has the headroom to increase its borrowings and expand its debt-to-GDP level to 50 percent by the end of the year.
Moreover, he said some credit rating agencies have affirmed the fiscal soundness of the Philippines. Earlier this month, the Japan Credit Rating Agency upgraded the country’s credit rating to A- from BBB+, as it noted the Philippine economy’s resiliency even amid the COVID-19 pandemic.
S&P Global Ratings also upheld the country’s BBB+ credit rating and stable outlook, defying a trend of downgrades and negative outlook revisions in other parts of the world.
Economic managers are projecting the budget deficit to widen to 8.4 percent of GDP this year, with COVID-19 expenditures expected to rise amid weaker revenue generation.
Earlier, Finance Secretary Carlos Dominguez III said the DOF has to date raised $4.83 billion in concessionary budgetary support financing from various multilateral institutions for COVID-19 response.
These include loans from the Asian Development Bank, World Bank, the Asian Infrastructure Investment Bank and the Agence Française de Développement of France.
Of this amount, Dominguez said $2.26 billion has already been disbursed for government programs.
In addition, the finance chief said the government also raised $2.35 billion last April from the issuance of US-dollar denominated global bonds, priced at the lowest coupon rate ever achieved by the government for these debt papers despite market volatility caused by COVID-19.