The Philippines’ foreign loans and grants being spent on COVID-19 response totaled $10.6 billion (over P509 billion) as of November, according to Finance Secretary Carlos Dominguez III.
“Fighting the pandemic is costly, as you very well know. Fortunately, the Philippines quickly accessed financing from our development partners and the commercial markets at very low rates, tight spreads and longer repayment periods,” Dominguez told the Philippines-Japan Business Investment Virtual Forum 2020 on Tuesday.
Among multilateral lenders, Dominguez’s presentation showed that as of Nov. 23, the Philippines secured $3.8 billion in loans from the Manila-based Asian Development Bank; $1.78 billion from the Washington-based World Bank; and $750 million from the Beijing-based Asian Infrastructure Investment Bank.
From bilateral partners, the Japan International Cooperation Agency extended $917.9 million in loans; Agence Française de Développement, $275.7 million; and $100 million came from The Export-Import Bank of Korea.
The Philippines also raised $2.35 billion from its issuance of US dollar-denominated global bonds across two tenors last May.
The proceeds from these program loans and commercial borrowings were to be spent as budget support facilities for COVID-19 response.
As of last month, the Philippines likewise availed itself of $615 million in loans for COVID-19-specific projects.
Another $26.36 million in grants had been given to the Philippines for specific projects related to the fight against COVID-19.
“This year, we expect to collect less in taxes even as we increase spending in health-care and relief measures. The borrowings we have secured at concessional rates will help cover our revenue shortfall,” Dominguez said.
Dominguez told Japanese investors that “the people and government of Japan have been very generous at providing much-needed support for the Philippines.”
On top of the financial assistance in the fight against COVID-19, Dominguez also acknowledged Japan’s help in rolling-out the Duterte administration’s ambitious “Build, Build, Build” program. “Our infrastructure program is a sound strategy strongly supported by our development partners, especially Japan, through soft project loans and official development assistance.”
Moving forward, Dominguez said that “with our enduring financial strength, we will meet these obligations.”
Dominguez earlier on acknowledged that repaying these massive borrowings would entail jacking up taxes in the future on top of selling some government assets such as mining sites and contracts as well as privatizing its gaming operations. INQ