‘PH needs to grow over 6% in next admin’

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The economy needs to expand by over six percent annually in the next six years to grow out of the debt incurred due to the coronavirus disease 2019 (COVID-19) pandemic crisis.

“The biggest challenge for the next administration is really to grow out of the debt that we incurred during the pandemic, which was natural because our revenues went down due to the lockdowns and we had increased expenditures, so we had to borrow more money,” Carlos Dominguez, Department of Finance (DOF) secretary, said in an interview with Bloomberg TV.

“Some of our debt has a 40-year term, so we assumed debt at very favorable terms, in terms of tenor as well as interest rates. So we’re not worried about the repayment, (but) we have to really grow out of the debt. In other words, expand our economy by better than six percent per year, over the next five or six years,” he added.

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Dominguez said the next administration will have to design policies and stick to very strict fiscal discipline to grow out of the debt problem.

“However, everything is in place in the Philippines to achieve that. Last year, we achieved the growth of 5.7 percent. So we were well on our way to recovery, except now we have this Ukraine crisis, and that’s going to weigh a bit heavily on us. We’re affected by the increase in prices of fuel, of grain,” Dominguez said.

The Philippines’ finance chief said he plans to have discussions with his counterparts in the different Asean countries and see what can be done together amid the higher commodity prices due to the Russia-Ukraine conflict.

“I’ve also started discussions with the Asian Development Bank (ADB) and the World Bank (WB). I said they came together very well in the financing of the vaccines for the pandemic. I said, this is another opportunity for you guys to work together and work together with the finance ministers involved to see what kind of rescue packages that can be done particularly for the less developed countries,” he said.

In a recent economic bulletin, the DOF said that as of January 14, 2022, the Philippines has borrowed P1.3 trillion and has received grants amounting to P2.7 billion to fund the anti-COVID-19 program along with 76.8 million doses of donated vaccines.

“The loans will have to be repaid over a period of 40 years starting 2020. This will require a fiscal consolidation program and improved revenue collection,” the DOF said.

“The loans and grants raised from bond auctions and grants helped the country in fighting the COVID-19 virus and were instrumental in restoring economic growth in 2021,” it added.

The DOF said that from 2020 to January 14, 2022, the national government raised P559.08 billion from ROP Bonds, P303.37 billion from ADB, P291.95 billion from the WB, P66.01 billion from Asian Infrastructure Investment Bank, P47.56 billion from Japan International Cooperation Agency, P28.96 billion from Agence Franí§aise de Développement and P10.15 billion from Export-Import Bank of Korea.

The national government also received a total of P2.7 billion in grants from three partners: WB-EU at P1.1 billion, Government of Japan at P1.3 billion and ADB, P406.2 million.

“The country has received a total of 76.4 million doses of donated vaccines from bilateral donations and COVAX facility. A total of 85.5 percent of the total are from the COVAX facility and the 14.5 percent are from bilateral donations,” the DOF said.

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