Dominguez expects higher debt after coronavirus
Published Apr 9, 2020 12:00 am
By CHINO S. LEYCO
The national government may tap its financing means to offset the economic damage from the coronavirus that also wreaked havoc on the global economy, the Department of Finance (DOF) said.
Finance Secretary Carlos G. Dominguez III
Finance Secretary Carlos G. Dominguez III said yesterday that the national government may see an increase in debt in the near-term following the coronavirus disease (COVID-19) pandemic.
Dominguez said that the government’s debt-to-gross domestic product (GDP) ratio may increase to “slightly over” 46 percent after COVID-19, from the present 41.6 percent.
According to the finance chief, the COVID-19 crisis is conservatively expected to last until the end of May, thus the government requires a sizeable amount of funds to support the country’s economy and its health system.
As early as now, Dominguez said the Duterte administration already earmarked ₱23 billion in funding for its COVID-19 fight, which is equivalent to five percent to six percent of the nation’s GDP.
“We are projecting a zero to possibly 0.8 percent negative growth this year. Definitely businesses are impacted, specially businesses in the tourism sector, as well as retail sector,” Dominguez said in a televised interview with CNBC.
“Our collections from tax collections are definitely going to be a bit lower than our original target,” he added.
The DOF is currently negotiating loans amounting to $5.7 billion with the lowest interest rates from the Asian Development Bank, the World Bank and Asian Infrastructure Investment Bank, Dominguez said.
“After filling this up, we will then most likely go to the commercial markets,” said Dominguez, the Duterte administration’s chief economic manager.
He is also not ruling out that “if needed” President Duterte may seek for additional budget from Congress for the remaining months of 2020.
Despite the unfavorable economic outlook, the finance chief assured the national government has “a lot of headroom” and “can finance” the required funds to ensure the country would remain afloat this year.
Before the health crisis, Dominguez said the Philippine economy has been growing steadily for the last 10-years at an average of 6.3 percent and 5.9 percent last year.
Finance Secretary Carlos G. Dominguez III
Finance Secretary Carlos G. Dominguez III said yesterday that the national government may see an increase in debt in the near-term following the coronavirus disease (COVID-19) pandemic.
Dominguez said that the government’s debt-to-gross domestic product (GDP) ratio may increase to “slightly over” 46 percent after COVID-19, from the present 41.6 percent.
According to the finance chief, the COVID-19 crisis is conservatively expected to last until the end of May, thus the government requires a sizeable amount of funds to support the country’s economy and its health system.
As early as now, Dominguez said the Duterte administration already earmarked ₱23 billion in funding for its COVID-19 fight, which is equivalent to five percent to six percent of the nation’s GDP.
“We are projecting a zero to possibly 0.8 percent negative growth this year. Definitely businesses are impacted, specially businesses in the tourism sector, as well as retail sector,” Dominguez said in a televised interview with CNBC.
“Our collections from tax collections are definitely going to be a bit lower than our original target,” he added.
The DOF is currently negotiating loans amounting to $5.7 billion with the lowest interest rates from the Asian Development Bank, the World Bank and Asian Infrastructure Investment Bank, Dominguez said.
“After filling this up, we will then most likely go to the commercial markets,” said Dominguez, the Duterte administration’s chief economic manager.
He is also not ruling out that “if needed” President Duterte may seek for additional budget from Congress for the remaining months of 2020.
Despite the unfavorable economic outlook, the finance chief assured the national government has “a lot of headroom” and “can finance” the required funds to ensure the country would remain afloat this year.
Before the health crisis, Dominguez said the Philippine economy has been growing steadily for the last 10-years at an average of 6.3 percent and 5.9 percent last year.