The Philippines will borrow at least P400 billion to support the COVID-19 economic recovery efforts, an official of the Department of Finance said Tuesday.
Finance Assistant Secretary Antonio Lambino II said the funding will come from the World Bank, the Asian Development Bank (ADB), and the Asian Infrastructure Investment Bank (AIIB) and other financial institutions.
“Meron po tayong binubuo na mga pondo para po ma-finance po natin ang ating economic recovery plan,” Lambino said in a televised briefing.
As of June 11, the Philippine government has raised a total of $6.4 billion (more than P300 billion) from loans extended by the World Bank, AIIB, and the ADB as well as the recent dual-tranche issuance of US dollar-denominated global bonds, according to President Rodrigo Duterte’s report to Congress on Monday.
Economic managers have projected that revenue collection this year will be lower at 13.6% of the gross domestic product (GDP) at P2.61 trillion compared to expected spending level at P4.18 trillion or 21.7% of GDP due to the economic fallout resulting from the health crisis.
This led to a projected increased deficit level at P1.56 trillion or 8.1% of GDP, higher than the earlier assumed 5.3% in March. To finance the deficit, economic managers see an increase in borrowing which will be around 50% of GDP.
World Bank senior economist in the Philippines Rong Quian said on June 9 that the Philippines can still borrow due to its “strong macroeconomic fundamentals.” —AOL, GMA News