The government’s pandemic-induced debt will be repaid over a period of four decades, the Department of Finance (DOF) said over the weekend.
In an economic bulletin, the DOF said as of Jan. 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 Jan. 14, 2022, the national government raised P559.08 billion from ROP Bonds, P303.37 billion from Asian Development Bank (ADB), P291.95 billion from the World Bank (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 including WB-EU with P1.1 billion, Government of Japan with 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.
Meanwhile, in a separate economic bulletin also over the weekend, the DOF said the continuing rapid rise in capital formation and foreign direct investments (FDI), particularly for those sectors not seeking fiscal incentives, implies that investors are attracted primarily by the country’s favorable economic fundamentals.
“The Philippine economy recovered partially its investment-led growth orientation in 2021 as lockdowns were eased and vaccination was rolled out. As a percent of real gross domestic product (GDP), capital formation which is the most comprehensive measure of investment, rose from 19.2 percent in 2020 to 21.6 percent in 2021,” the DOF said.
“However, this is still lower than its 26.5 percent investment-GDP ratio in 2019. Capital formation is one of the foremost determinants of future growth, in addition to employment and factor productivity,” it added.
The DOF also said FDI increased by 54.2 percent in US dollar terms. As a percent of GDP, this shows a rise from 1.89 percent in 2020 to 2.67 percent in 2021, exceeding the 2.3 percent level set in 2019.
