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Philippines to borrow more to cover coronavirus response

Published 07/08/2020, 03:29 PM
Updated 07/08/2020, 03:30 PM
© Reuters.

MANILA, July 8 (Reuters) - The Philippine government expects
the country's debt-to-GDP ratio to rise to 50% from 39% last
year, its finance secretary said on Wednesday, as it increases
borrowing to mitigate the economic impact of the new coronavirus
pandemic.
With revenues in the first half down 16% from last year as
virus curbs shuttered businesses, Finance Secretary Carlos
Dominguez said the government is looking to borrow more to
finance the budget and programmes to help revive the economy.
"We are planning to borrow up to 50% of GDP, up from 39% at
the end of 2019," Finance Secretary Carlos Dominguez told an
economic forum. "We have the capacity to borrow...and we have
the capacity to pay these loans in the future," Dominguez said.
The government is seeking a record 4.3 trillion pesos
($86.83 billion) budget for 2021 focused on reviving an economy
that is expected to shrink for the first time in two decades
this year and for containing the spread of the coronavirus.
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"Our economy has slowed down during the COVID crisis. We
have not been able to collect taxes as we had planned, and we
have been spending a lot of money on our COVID response,"
Dominguez said.
The Southeast Asian country, which used to enjoy one of the
world's fastest growth rates before the pandemic, is projected
to suffer a 2% to 3.4% decline in gross domestic product this
year, before returning to growth in 2021.
($1 = 49.5200 Philippine pesos)

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