The government has secured from foreign lenders some $18.4 billion worth of loans and grants for its Covid-19 response, according to the Department of Finance (DOF).
“As of April 28, 2021, were able to borrow $18.4 billion from external or from foreign sources. So basically this is $16.26 billion of which, is for budget support, while $2.14 million is for project financing,” Finance Undersecretary Mark Dennis Joven said in an interview with PTV on Friday.
In a text message, Joven told the BusinessMirror that about $3 billion of the total came from selling euro-denominated bonds ($2.53 billion) and samurai bonds ($500 million).
The other $15.4 billion came from foreign loans and grants.
Joven said they opted to look for additional funding to counter the economic slowdown caused by business disruptions amid the pandemic.
He noted the community quarantine classifications last year led to the closure of many establishments, both permanent and temporarily, leading to lower tax take for the government.
During the same period, government expenses to help those affected by the pandemic shot up.
“That is why we need [the loans and grants] for fill up the short run gap [in our fund needs],” Joven said.
He noted such increase in foreign borrowing is not unique to the Philippines as other countries, particularly in the Asean region, are engaging in the said practice.
DOF said that $1.2 billion of the loans and grants will be used for the procurement of vaccines.
Currently, Joven said $100 million of the said amount was already used to pay for vaccines, which were already delivered.
Image courtesy of AP/Aaron Favila
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