The Philippines was able to secure financing support from development partners and commercial markets for the country’s coronavirus disease 2019 (COVID-19) response amounting to $10.6 billion to date, data from the Department of Finance (DOF) showed.
This was the amount secured as of November 23, 2020, according to a presentation yesterday made by Carlos Dominguez, DOF secretary.
Of the said amount, $3.8 billion is budgetary support from the Asian Development Bank, $2.35 billion in global bonds, $1.78 billion budgetary support from the World Bank, $917.9 million from the Japan International Cooperation Agency, $750 million from the Asian Infrastructure Investment Bank, $275.7 million budgetary support from the Agence Française de Développement, $100 million budgetary support from Export-Import Bank of Korea, $615 million in loans for COVID-19 specific projects and $26.36 million in grants.
As quarantine measures were implemented since mid-March to address the spread of the virus, economic activity was affected, thus tax revenues were weak over the past few months as compared to previous years. The government had to tap various sources to support its COVID-19 response efforts.
“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 said in a statement yesterday.
“This year, we expect to collect less in taxes even as we increase spending in healthcare and relief measures. The borrowings we have secured at concessional rates will help cover our revenue shortfall,” he added.
Dominguez said the public health effort will be a “marathon.”
“No one really knows how long this public health crisis will persist. The best case scenario is a widespread availability of a safe and effective vaccine by next year. Even then, we are not sure how quickly this will contain infections. There is no magic wand to wave away this virus. We must be prepared for a long battle,” he said.
“Despite the many populist excuses to blow up the deficit and bury future generations in debt, the Philippines has chosen the path of fiscal prudence,” he added.
Dominguez said the goal is to land the deficit-to-gross domestic product ratio in the middle range of Asean neighbors and credit rating peers around the world.
“This conservative approach will allow us to continue accessing the financing we need at favorable terms for the Filipino people,” he said. – A. Celis