COVID-19 foreign loans, grants reach $8.83B as of August —DOF chief

The Philippines has raised a total of $8.83 billion in foreign budgetary support financing, project loans, and grants for the government’s response and recovery efforts amid the COVID-19 pandemic.

In his remarks during the House of Representatives’ budget hearing for fiscal year 2021 on Friday, Finance Secretary Carlos Dominguez III said the amounts were raised by the Department of Finance “from our development partners and commercial markets.”

“Of the total amount $5.98 is budget support financing from the Asian Development Bank, World Bank, Asian Infrastructure Investment Bank, Development Agency of France, and Japan International Cooperation Agency,” Dominguez said.

“We raised $2.3 billion from our latest global bond offering, the lowest ever coupon rate in the US dollar market,” he said.

The remaining $496.36 million is composed of grant assistance and project loan financing.

Data from the DOF’s website showed that $6.26 billion of the COVID-19 financing secured has been disbursed to the government, meaning it is already in the Treasury.

Meanwhile, the total of $496.36 million in grant and loan financing “have been provided in support of various projects to be implemented by agencies involved in COVID-19 response,” according to the DOF.

“Borrowings will support priority expenditures necessary for the country’s swift recovery from the COVID-19 crisis and public investments in infrastructure and social services,” Dominguez said.

The Finance chief said the government’s gross borrowings will reach P3.003 trillion this year, which will raise the debt-to-gross domestic product ratio to 53.9%.

Of the total borrowings, 74% will be sourced domestically while 26% will be from overseas.

Dominguez III has said that the Philippines will sustain its P3-trillion borrowing program in 2021. 

For next year, gross borrowings are seen to reach P3.025 trillion, equivalent to 58.1% of GDP, with a financing mix of 85:15 in favor of local sources.

Budget and Expenditures and Sources of Financing for the fiscal year 2021 showed the government projects that the total outstanding debt for 2020 will amount to P10.16 trillion while for 2021 it is seen to reach P11.982 trillion. —LDF, GMA News