THE government has so far secured a total of $23.4 billion (P1.17 trillion) in financing from foreign lenders for the government’s Covid-19 response, Finance Secretary Carlos G. Dominguez III said.
Of the total Covid-19-related external financing contracted by the government from March 16 2020 until December 7 this year, Dominguez said $21 billion was contracted for general budget support to cover up the drop in the state revenue collections while $2.4 billion was for Covid-19 response and recovery projects, including vaccine procurement.
“Out of the $21-billion budget support financing contracted by the government, a total of $19.8 billion has been disbursed to the government since March of last year to help bridge the budget gap,” he said in a forum on Wednesday.
Meanwhile, half or $1.2 billion of the total $2.4-billion grant and loan financing contracted in support of various Covid-19 related projects has also been disbursed to the government.
“These projects include the procurement of laboratory equipment, medical supplies, and vaccines, as well as interventions that will address the impact of the pandemic on rural communities. These are being implemented by the relevant agencies involved in our pandemic response,” he said.
In the same forum, Dominguez said the country’s fiscal position “remains solid” and the economy is poised for a strong and early recovery as soon as it reopens along with the implementation of the massive vaccination program.
“From January to October 2021, our total revenue collection has been exactly as projected. Revenues reached P2.5 trillion, 5 percent higher than last year’s level. This is equivalent to 86 percent of the P2.9 trillion revised revenue program for the year,” he said.
Meanwhile, total expenditures for the same 10-month period reached P3.7 trillion, exceeding the previous year’s level by 12 percent. It is also equivalent to 78 percent of the P4.7-trillion program for the year.
The budget deficit as of end-October widened by 27.94 percent to P1.2 trillion from P940.6 billion a year ago.
The economic team expects this year’s budget deficit to reach P1.8 trillion or equivalent to 9.5 percent of GDP.
“Nevertheless, the budget deficit as a percentage of GDP is projected to decline starting next year as revenue starts to recover and grow at a faster rate than expenditures. This puts less pressure on our borrowing requirements and debt sustainability threshold,” he said.
The national government’s outstanding debt as of end-October this year has reached a new record-high of P11.97 trillion.
While National Treasurer Rosalia V. de Leon earlier said they expect upcoming repayments to bring down the debt stock, the latest figure is still beyond the government’s expected level of P11.73 trillion by the end of this year.
The current debt stock level is also 19.38 percent higher than P10.028 trillion a year ago.
Based on the budget documents, the government expects outstanding debt to hit P13.42 trillion in 2022.
The country’s debt-to-GDP ratio this year is projected to rise to 59.1 percent and peak next year at 60.8 percent—slightly above the internationally accepted threshold—before gradually tapering off to 60.7 percent and 59.7 percent in 2023 and 2024.
As of the end of the third quarter this year, the country’s debt-to-GDP ratio is already at 63.1 percent.
The Department of Finance also sees the national government returning to its pre-pandemic debt and budget deficit levels as early as 2024 or by 2025, if the recommended fiscal measures are passed early by the next administration, and if the economy quickly recovers.