Foreign funds to fight COVID-19 hit $9.41B

The Philippines’ newest loan from Japan has increased foreign financing for COVID-19 response to $9.41 billion to date, the latest Department of Finance (DOF) data on Monday showed.

As of Sept. 18, $7.55 billion or 86 percent of the $8.79 billion in borrowings for COVID-19 budgetary support were already disbursed to the Bureau of the Treasury.

The budgetary support financing for COVID-19 response included six loans from the Asian Development Bank (ADB), three loans from the World Bank, one loan from the Asian Infrastructure Investment Bank (AIIB), two loans from the Agence Française de Développement (AFD) and two loans from the Japan International Cooperation Agency (Jica).

Last week, the Philippine and Japanese governments signed the 50-billion yen ($458.95 million) post-disaster standby loan, which could be tapped during public health emergencies and lockdowns.

The $2.35 billion raised from the sale of dollar-denominated global bonds last May was also used for the COVID-19 budget.

For specific COVID-19-related projects, $595 million in loans—one extended by the ADB and two from the World Bank—had been obtained by the Philippines.

The ADB and Japan also provided grants totaling $26.36 million to fight the health and socioeconomic crises inflicted by the COVID-19 pandemic.

In its Fiscal Risks Statement 2021 report, the Development Budget Coordination Committee (DBCC) noted that “the impact of the COVID-19 pandemic and response measures will elevate debt-to-gross domestic product above its previous trajectory.”

The combined impact of higher financing requirements and stagnating growth is projected to cause the debt ratio to increase to around 53 percent for 2020 before resuming its downward path over the medium term, the DBCC said.

“Despite the natural immediate spike in the debt ratio, the national government’s debt is projected to be broadly manageable,” it added. INQ