Philippines to borrow around P3 trillion in 2021, finance chief says

MANILA - Finance Sec. Carlos "Sonny" Domínguez III said Monday the loans that the Philippines took since 2020 were not only used for acquiring COVID-19 vaccines but also for other expenditures, such as paying other loans and government projects.

His statement came after Senators Panfilo Lacson and Risa Hontiveros questioned the Philippines' supply of COVID-19 vaccines and the pace of the vaccine drive, respectively, amid a renewed surge of coronavirus infections in the country.

Lacson tweeted a list of Philippine loans from various organizations and asked where the vaccines are, while Hontiveros noted that the number of vaccinated health workers is still low, given that the vaccine drive started on March 1.

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Dominguez explained in a public briefing that aside from the acquisition of COVID-19 vaccines, the Philippines paid for its loans before the pandemic. He said that in 2019, the country spent P3.8 trillion on various projects while collecting only P3.1 trillion in taxes. The country only had a deficit of P666 billion.

But due to the COVID-19 crisis which began in 2020, the deficit rose to P1.37 trillion in the same year after the Philippines spent P4.23 trillion, of which "almost P250 billion" were spent on financial aid for Filipinos who lost their jobs or were not able to generate income due to the coronavirus lockdown, Dominguez said.

According to the finance chief said that in the same year, only P2.86 trillion in taxes were collected by government, and the Philippines had to borrow P2.74 trillion to cover the shortfall.

"First part of the borrowing was to cover the deficit, so that we could spend the P4.23 [trillion]," Dominguez said.

"We borrowed more because ... we have more projects that we were still funding like the Build, Build, Build [infrastructure program], the different bridges we were starting, so we borrowed more. Plus, bumaba ho 'yung interest rate in 2020, so humiram tayo para bayaran 'yung old debt kasi mas mura na ang interest (The interest rate in 2020 went down so we took another loan to pay our old debt).

"At the end of 2019, our debt to GDP was only 39.6%. Now it's 54.5%. And that is caused mainly or solely by the COVID-19 crisis," he said.

Dominguez explained that the Philippines has P82.5 billion funds for the COVID-19 vaccines, including waste disposal and logistics. According to him, P12.5 billion of which were allocated from the national budget, while P58.4 billion came from loans and financing by the World Bank, Asian Development Bank, and Asian Infrastructure and Investment Bank. Another P11.6 billion also came from the Official Development Assistance (ODA).

"Now, P82.5 billion pesos, will buy us enough doses to inoculate 100% of our adult population, kasi according to the Department of Health, 'di pa pwede i-inoculate 'yung mga bata (minors can't be inoculated)," he said.

"So that money … plus the private sector and another P10 billion from the LGUs, we'll be able to vaccinate all the adults in the Philippines this year," he added.

Most of the funds, especially the loans, are "in the bank yet", Dominguez said.

"Sa 2021 ho, [our] revenues will be more or less flat as compared to 2020. It's only P2.88 trillion. Our expenditures will be higher, to P4.66 trillion, because we are spending more for healthcare, more for Build, Build Build, and salaries of government," he projected.

"So [our] deficit is going to go up, from P1.37 trillion to P1.78 trillion. So we will borrow, this year, around P3 trillion. A little more than 2020. That's the plan," Dominguez added.

To date, the Philippines has acquired 600,000 China-donated COVID-19 shots from Beijing-based Sinovac Biotech, and 525,600 doses of UK's AstraZeneca-Oxford vaccine, through the COVAX Facility initiative.

Vaccine "czar" Secretary Carlito Galvez said 1.4 million more Sinovac doses are set to arrive in the country this month, and about 900,000 AstraZeneca by early April.

As of Monday, the Philippines has logged 671,792 COVID-19 cases, 80,970 of which are active. Nearly 13,000 fatalities have been reported, while 577,850 have recovered from the deadly disease.

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