Philippines to secure more loans for Covid response

Manila, Sep 7 The Philippines will continue to secure loans this year and in 2022 to support its Covid-19 response measures and economic recovery program amid the pandemic, Finance Secretary Carlos Dominguez said.

"We will continue with our sustainable and prudent borrowing to fund both economic investments and the pandemic response," Xinhua news agency quoted Dominguez as saying to legislators during Monday's briefing before the House of Representatives committee on ways and means, stressing the country's indebtedness stays "within the prescribed bounds of fiscal viability".

Dominguez explained that the incurring debt during the pandemic helps generate a higher level of economic activity needed to keep the economy afloat.

However, he stressed the need to use the borrowings prudently.

"We should use them to beef up our health requirements and to generate productive economic activity. If we do not do these things, the economy will collapse even further. We have to spend wisely," Dominguez told the committee.

The Philippines' debts ballooned to 11.61 trillion pesos ($232 billion) at the end of July 2021, according to data by Bureau of the Treasury of the Philippines.

The House committee held the briefing for deliberating on several bills seeking the creation of an oversight body to monitor and oversee the government's borrowings and indebtedness.

The coronavirus pandemic has necessitated additional spendings to reinforce the country's health system, purchase medical equipment, and procure vaccines, Dominguez said, adding this has temporarily brought the deficit level to 7.6 per cent last year, or almost double the threshold that the government tried to maintain.

Dominguez stressed that the 15 percentage point increase in the debt-to-GDP ratio from 39.6 per cent in 2019 to 54.6 per cent in 2020 "is still within the prescribed bounds of fiscal viability".

The Philippines is grappling with a surge of Covid-19 infections fueled by the highly infectious Delta variant.

The Southeast Asian country now has reported 2,103,331 confirmed cases of Covid-19, with 34,337 deaths.