Gov’t to raise foreign borrowing program for 2014

The government plans to raise its foreign borrowing program for 2014, as it seeks to take advantage of the support being offered by various development lending institutions for the country’s post-calamity reconstruction effort.

Budget Secretary Florencio Abad said that the loans being offered were concessional. This means that the loans carry interest rates much lower than commercial ones.

“It would be good for the country to take advantage of the generosity of our development partners,” Abad told reporters.

The government has yet to firm up its 2014 borrowing plan. Originally, the government was supposed to borrow $1 billion from the foreign capital market through the issuance of sovereign bonds. Also, it was supposed to take out $2.2 billion worth of official development assistance (ODA).

The biggest providers of ODA are Asian Development Bank, World Bank and Japan International Cooperation Agency.

Funds to be secured from abroad were supposed to make up 13 percent of the government’s total borrowings for next year. Domestic creditors would account for the bigger share of 87 percent.

Abad said the borrowing plan could be adjusted to give way for more cheap foreign loans.

Last Wednesday government economic officials and representatives of foreign lending institutions sat down to discuss the proposed recovery plan, called “Reconstruction Assistance on Yolanda” (RAY).

During the meeting, potential lenders were given the opportunity to decide on which recovery projects and programs to support.

The Asian Development bank has offered nearly $900 million worth of financial assistance.

The World Bank also offered $500 million worth of cheap loan, while the Japan International Cooperation Agency also offered the same amount of assistance, he said.

The government expects more loan offers to come in the next few weeks, Abad said.  Michelle V. Remo