COVID-19 financing pushes PH loans to new high of P8.6T | Inquirer Business

COVID-19 financing pushes PH loans to new high of P8.6T

By: - Reporter / @bendeveraINQ
/ 06:24 PM June 02, 2020

Government borrowings to finance COVID-19 response have driven debts through the roof, pushing total to a new high of P8.6 trillion in April alone.

At least two-thirds of the debts were from domestic sources, some P5.9 trillion as of April. It was up by nearly 1 percent month-on-month and 12.6 percent year-on-year, according to data from the Bureau of Treasury released on Tuesday (June 2).


In a statement, the Treasury said it adjusted the domestic debt figure in March to add the P300 billion that the Bangko Sentral ng Pilipinas (BSP) released under a bond repurchase agreement.

The Treasury said in April, a total of P50.82 billion worth of government securities had been issued while peso appreciation cut only P170 million from the value of dollar bonds issued the same month.


At end-April, the peso strengthened to 50.444 to a dollar from 50.78 to a dollar last March.

At the end of the first four months of 2020, foreign debt was P2.7 trillion, up nearly 3 percent month-on-month and 6 percent year-on-year.

In April alone, the Treasury said foreign loans amounted to P87.34 billion just to raise funds for COVID-19 response.

Value of foreign loans, however, fell by P15.1 billion when the peso strengthened.

In April, the Cabinet-level Development Budget Coordination Committee (DBCC) projected this year’s outstanding debt to hit a record-high P9.589 trillion or 49.8 percent of gross domestic product—a debt-to-GDP ratio poised to be the highest in 10 years.

While the Philippines had managed to gradually reduce its debt-to-GDP ratio, the government will ramp up borrowings to fund COVID-19 response.

Debt-to-GDP ratio was 39.6 percent in 2019, the lowest since 1986.


Last week, the Philippines secured a combined $1.25 billion in loans—$750 million from China-led Asian Infrastructure Investment Bank (AIIB) and $500 million from the Washington-based World Bank.

The Inquirer had learned that the AIIB and the World Bank will co-finance another COVID-19-related loan, this time for health infrastructure.

On top of last week’s two new loans, the Philippines as of mid-May already borrowed $4.85 billion from multilateral lenders—$1.7 billion through two loans from ADB and $800 million from World Bank. This was on top of $2.35 billion in dollar-denominated bonds sold abroad last April.

Edited by TSB

For more news about the novel coronavirus click here.
What you need to know about Coronavirus.
For more information on COVID-19, call the DOH Hotline: (02) 86517800 local 1149/1150.

The Inquirer Foundation supports our healthcare frontliners and is still accepting cash donations to be deposited at Banco de Oro (BDO) current account #007960018860 or donate through PayMaya using this link.

Read Next
Don't miss out on the latest news and information.

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: #COVID19PH, Bonds, borrowings, coronavirus, coronavirus Philippines, debts, Dollars, GDP, Loans
For feedback, complaints, or inquiries, contact us.

© Copyright 1997-2022 | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.