Philippine secures $13 billion in COVID-19 foreign funds

MANILA, Philippines — The Philippines has so far secured $13.36 billion in foreign loans and grants to finance its response to the coronavirus pandemic, the Department of Finance (DOF) reported yesterday.

Based on latest data posted on the DOF’s website, the government has raised a total of $12.72 billion in budgetary support financing from multilateral agencies and the offshore commercial debt market as of Dec. 15, 2020.

The DOF said some $10.77 billion has already been disbursed to the government.

In addition, the DOF said some multilateral and bilateral partners have also extended $641.36 million in grants and loan financing to support various projects implemented by agencies involved in the COVID-19 response.

This year, the government has ramped up borrowings to plug its budget deficit, which is now expected to widen to 7.6 percent of the gross domestic product amid weak revenue generation and higher spending requirements due to COVID-19.

DOF data showed that about 40 percent or P5.1 billion of the total budgetary support financing as of Dec. 15 was raised from the issuance of US-dollar denominated global bonds in the offshore debt market.

The Philippines had issued $2.35 billion in US dollar-denominated global bonds with maturities of 10 years and 25 years last April. The country returned to the market once again this December and successfully sold $2.75 billion worth of bonds with tenors of 10.5 years and 25 years.

Meanwhile, the Asian Development Bank (ADB) has provided $3.8 billion worth of loans to the Philippines so far this year. The World Bank also extended $1.78 billion in total loans.

Budgetary support financing from the Japan International Cooperation Agency (JICA) has amounted to $917.9 billion, while loans from the Asian Infrastructure Investment Bank (AIIB) have reached $750 million.

The Agence Française de Développement and the Export-Import Bank of Korea likewise extended loans to the country amounting to $275.7 million and $100 million, respectively.

In terms of project loan financing, $490 million came from the World Bank and $125 million from the ADB.

The ADB also gave the Philippines $8 million in grants, while the Japanese government extended aid amounting to $18.36 million.

According to data from the Bureau of the Treasury (BTr), the government’s gross financing has reached P2.835 trillion in the first 10 months of the year, accounting for 95 percent of the P3-trillion program.

Bulk or P2.26 trillion of this amount came from domestic lenders, while P574.43 billion was sourced from foreign creditors.

As a result, the Philippines’ debt pile hit P10.03 trillion by October 2020, 29.7 percent higher than the P7.73 trillion recorded at the end of 2019.

By the end of this year, the Philippines’ outstanding debt is seen to hit P10.16 trillion, before further increasing to P11.98 trillion in 2021. These would translate to a debt-to-gross domestic product level of 53.9 percent for 2020 and 58.1 percent for 2021.

Political agenda

Sen. Risa Hontiveros urged the government to steer clear of political agenda in procuring COVID-19 vaccines.

Hontiveros issued the call after experts raised questions on the efficacy of the COVID-19 vaccine produced by Chinese pharmaceutical Sinovac, which government entered a deal with recently for 25 million doses for roll-out in the first quarter of 2021.

“Let’s make it clear: the vaccine is a health solution, not a political favor. We should buy vaccines to protect our people from COVID-19, not to advance anyone’s political agenda,” Hontiveros said.

She said that the Sinovac vaccine has yet to undergo assessment by the Health Technology Assessment Council (HTAC) and the Food and Drug Administration (FDA).

“There is no problem if the Chinese vaccine is safe, effective and cheap but the domestic agencies need to back it up with scientific proof before we make any commitments. This stands for any and all possible vaccines. No shortcuts,” she said.

Hontiveros said there are multiple and undeniable issues surrounding the vaccine offered by China, including transparency of data and results, emerging side effects as seen in Peru and even a company history of bribery.

Hontiveros pointed out that the Sinovac vaccine is one of the most expensive COVID-19 vaccines available in the market, worth P3,629.50 in the Department of Health (DOH)’s projection of prices.

Hontiveros also warned against China’s “vaccine diplomacy,” citing leading research center Yusof Ishak Institute findings that the vaccine supply is “not unconditional” and that it could be used as a tool to advance the country’s interest in the West Philippine Sea.

Aside from those providing essential frontline services, the implementation of the government’s National COVID-19 Vaccination Program should include a portion of the labor force who help sustain the economy, Sen. Joel Villanueva said.

In a resolution, Villanueva sought the Senate to look into the details of the government’s vaccination plan, particularly “the readiness of the national government in rolling out the effective, equitable, affordable and timely COVID-19 vaccination of 100 percent of the Filipino population, especially to members of the labor force.”

“Many of our minimum wage earners face a high degree of risk in terms of their workplaces such as factories and construction sites, and live in highly dense areas with their families,” said Villanueva.

Villanueva suggested to consider including other frontline service workers such as those in the logistics sector, public transportation and other subsectors in the services industry who keep the economy running. — Cecille Suerte Felipe