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Philippines: No plan to borrow more – DOF chief
MANILA, Philippines — The Department of Finance sees no need to borrow more than programmed as it expects the economy to bounce back next year, according to DOF Secretary Carlos Dominguez.
In an interview with Bloomberg TV, Dominguez said there is no need to tap additional sources of financing outside the regular program of the government.
“We see no need to get out of the normal loan programs that we have planned,” Dominguez said, adding that it is not necessary, “at this point in time” to borrow more funds from the Bangko Sentral ng Pilipinas (BSP).
Last October, the BSP approved an advance credit to the national government amounting to P540 billion. This amount is on top of the P300 billion short-term loan provided by the BSP earlier this year.
Both are part of the Philippines’ P3 trillion borrowing program for 2020 to plug the deficit in the budget which is expected to reach 9.6 percent of gross domestic product (GDP). Next year, the government is programmed to borrow another P3 trillion.
Dominguez said the government is still waiting to see if “reserve amounts” from the central bank and other creditors would need to be tapped, depending on how long the pandemic would last.
But with the expected development of vaccines against COVID-19 by next year, the finance chief said there is no reason for the government to borrow more outside the planned program.
He said with the availability of a vaccine, the economy is expected to register a big bounce back in 2021, as it would inject confidence back into the economy.
Dominguez said the government is also seeing a lot of “green shoots” that signify the economy is on its track toward recovery.
“We are very happy that our remittances from abroad are holding up. They have not declined as much as we have expected. They’re only down about two and a half percent from last year, we were expecting something in excess of five percent,” he said.
“Our housing market for residential homes is holding up well. Our foreign exchange reserves are the highest ever at $104 billion, and our peso has increased in value by 4.9 percent since the beginning of the year,” he said.
Dominguez also said jobs lost during lockdowns have also started coming back.
“We are slowly bringing down our unemployment rate to where it was at the end of last year which was below five percent,” Dominguez said.
Dominguez also noted that the Philippines is still in a “very good” financial position owing to the reforms implemented earlier by the government.
The economy shrank by 11.5 percent in the third quarter, bringing the year-to-date contraction to an average of 10 percent after three consecutive quarters of decline.
For 2021, economic managers expect the economy to recover, with a GDP growth of 6.5 to 7.5 percent.
He said with the availability of a vaccine, the economy is expected to register a big bounce back in 2021, as it would inject confidence back into the economy.
Dominguez said the government is also seeing a lot of “green shoots” that signify the economy is on track toward recovery.
“We are very happy that our remittances from abroad are holding up. They have not declined as much as we have expected. They’re only down about two and a half percent from last year, we were expecting something in excess of five percent,” he said.
“Our housing market for residential homes is holding up well. Our foreign exchange reserves are the highest ever at $104 billion, and our peso has increased in value by 4.9 percent since the beginning of the year,” he said.
Dominguez also said jobs lost during lockdowns have also started coming back.
Source: https://www.philstar.com/business/2020/11/18/2057601/no-plan-borrow-more-dof-chief