THE government’s domestic borrowings for 2020 may be lower than the programmed share of 75 percent to its total financing, as multilateral institutions are being tapped for funding for its coronavirus disease 2019 (COVID-19) response.
“We target between 70 percent to 72 percent for domestic borrowings,” Rosalia de Leon, national treasurer, told reporters through Viber yesterday.
The government initially had a borrowing program of P1.4 trillion for 2020, with a mix of 75:25, in favor of domestic financing.
The Department of Finance said the government is accessing additional funds of up to P310 billion from multilateral institutions, such as the Asian Development Bank (ADB), World Bank and the Asian Infrastructure Investment Bank, for its strategy against COVID-19.
This is part of the government’s fiscal and monetary measures which seek to benefit every Filipino by raising funds for emergency initiatives and injecting more liquidity into the economy.
Meanwhile, the Bureau of the Treasury yesterday raised P20 billion domestically through its regular treasury bills auction.
De Leon said market players are now participating as liquidity gets additional infusion from reserve requirement ratio (RRR) cuts and large redemption of retail treasury bonds.
“(We) made full award as rates for both 182-day and 364-day treasury bills declined. Also full award for 91-day since it is still within acceptable range,” de Leon said after the auction.
“Strong liquidity onshore with maturity of P120 billion today and in anticipation of another RRR cut as announced by (Bangko Sentral ng Pilipinas) Governor (Benjamin) Diokno. Investors also now pricing in another policy rate cut as Gov. has likewise conveyed,” she added.
In a separate statement, the ADB said yesterday it tripled the size of its response to the COVID-19 pandemic to $20 billion and approved measures to streamline its operations for quicker and more flexible delivery of assistance.
The package expands ADB’s $6.5 billion initial response announced on March 18, adding $13.5 billion in resources to help ADB’s developing member countries counter the severe macroeconomic and health impacts caused by COVID-19. The $20 billion package includes about $2.5 billion in concessional and grant resources.
“This pandemic threatens to severely set back economic, social, and development gains in Asia and the Pacific, reverse progress on poverty reduction, and throw economies into recession,” Masatsugu Asakawa, ADB president, said.
“Our expanded and comprehensive package of assistance, made possible with the strong support of our Board, will be delivered more quickly, flexibly, and forcefully to the governments and the private sector in our developing member countries to help them address the urgent challenges in tackling the pandemic and economic downturn,” he added.
The new package includes the establishment of a COVID-19 Pandemic Response Option under ADB’s Countercyclical Support Facility. Up to $13 billion will be provided through this new option to help governments of developing member countries implement effective countercyclical expenditure programs to mitigate impacts of the COVID-19 pandemic, with a particular focus on the poor and the vulnerable.
Grant resources will continue to be deployed quickly for providing medical and personal protective equipment and supplies from expanded procurement sources, the ADB said.
Some $2 billion from the $20 billion package will be made available for the private sector. Loans and guarantees will be provided to financial institutions to rejuvenate trade and supply chains, the multilateral agency said.
Enhanced microfinance loan and guarantee support and a facility to help liquidity-starved small and medium-sized enterprises, including those run by female entrepreneurs, will be implemented alongside direct financing of companies responding to, or impacted by, COVID-19, it added.
The response package includes a number of adjustments to policies and business processes that will allow ADB to respond more rapidly and flexibly to the crisis, according to the multilateral bank.
These include measures to streamline internal business processes, widen the eligibility and scope of various support facilities, and make the terms and conditions of lending more tailored.
ADB said all support under the expanded package will be provided in close collaboration with international organizations, including the International Monetary Fund; World Bank Group; World Health Organization, UNICEF and other United Nations agencies; and the broader global community.
