Foreign loans to fight pandemic hit P1.18 trillion

MANILA, Philippines — The government has borrowed $23.4 billion, or about P1.18 trillion, from overseas sources to fund its pandemic efforts, but plans to bring down its financing program starting next year as revenue collections recover with the economy’s reopening.

Finance Secretary Carlos Dominguez said yesterday a total of $21 billion was borrowed from foreign sources to support the state’s budgetary requirements during the pandemic.

Another $2.4 billion was obtained from bilateral and multilateral lenders to bankroll programs and projects to contain the spread of the virus.

Dominguez said $21 billion, or around P1.06 trillion, was disbursed mostly by multilateral institutions Asian Development Bank (ADB), Asian Infrastructure Investment Bank (AIIB) and the World Bank.

He said the borrowings were remitted to national agencies tasked to carry out response efforts. He said the bulk of the financing was deployed to buy laboratory equipment, medical supplies and vaccine doses, as well as state interventions in vulnerable communities.

Dominguez said the government plans to bring down its borrowing program by 2022 as revenue efforts start to pick up with business establishments now operating at up to 70 percent capacity.

For the year, the government eyes to borrow a total of P3.07 trillion, on an 81:19 mix in favor of domestic sources, but will reduce this amount to P2.47 trillion in 2022 and P2.31 trillion in 2023, he said at the Kapihan sa Manila Bay.

The country’s outstanding debt has reached another record high of P11.97 trillion as of end-October, surpassing the government’s program for the year of P11.73 trillion, or 59.1 percent of the gross domestic product (GDP).

Worse, the debt stock, when measured against GDP, swelled to 63.1 percent, the highest since 2005’s 65.7 percent, as of the third quarter.