Gov’t set to adjust borrowing plan for 2014 due to ‘Yolanda’

The government’s borrowing plan for 2014 may have to be adjusted given the cheap loans being offered to the Philippines in the aftermath of Supertyphoon “Yolanda.”

It has been suggested that the share of low-cost official development assistance in the borrowing program be increased next year, while that of foreign commercial loans could be reduced.

“We would like to take advantage of the soft loans being offered to us,” Socioeconomic Planning Secretary Arsenio Balisacan told reporters Monday.

He said the government’s economic team was expected to soon discuss the proposal to tweak the borrowing program for next year to take into account the latest developments.

The Department of Finance has yet to come up with a definite borrowing plan for 2014, but the preliminary program suggested that the government will borrow 13 percent of its total financing requirement for the year from foreign sources.

This means that $2.2 billion would be borrowed from foreign creditors, of which $1 billion would be raised commercially via the sale of sovereign bonds in the international market. The rest would come from ODAs.

ODAs are loans from development institutions, such as the World Bank, Asian Development Bank and the Japan International Cooperation Agency.

The World Bank and the ADB have each offered $500 million worth of loans to the Philippines to help in the rehabilitation and reconstruction of calamity-stricken areas.

Smaller foreign development institutions are expected to also offer cheap financing to the country to help fund recovery initiatives.

Balisacan said ODAs being offered to the Philippines have very low interest rates and have long-term maturities of between 20 and 30 years.

Balisacan, who is also director general of the National Economic and Development Authority, said the government was poised to increase its 2014 budget allocation for infrastructure to accommodate the need to rebuild devastated areas.

In particular, he said, the government was considering raising public infrastructure spending next year from P360 billion to P420 billion, or from 3 percent to 3.5 percent of gross domestic product (GDP).

Regions hardest hit by “Yolanda” were Eastern, Central and Western Visayas, which together account for 12.5 percent of the country’s GDP and about 20 percent of its population.