The government will borrow an additional P35 billion from the domestic market this year to fund more than half of the P60 billion hike in the budget deficit when officials raised the program to P293 billion from P233 billion.

Finance Secretary Margarito B. Teves said they will get the P35 billion from local sources while the rest, or P25 billion ($500 million) is the foreign commercial borrowing. The inter-agency Development Budget Coordinating Committee has approved the increase in foreign loans to $2.5 billion from $2 billion for 2010.

“Since we raised the deficit program by P60 billion, of the amount $500 million we will get from external sources and P35 billion from domestic,” he confirmed.

“We only changed the commercial borrowing, but the ODA program is the same,” Teves added. This official development assistance loans are expected to reach $1.8 billion this year, of which $1 billion is the programmed loans and $800 million are project loans.

For 2010, the domestic borrowing program is P510 billion with the additional amount to plug the higher deficit. The Bureau of the Treasury is borrowing P110 billion in the first quarter from the domestic market.

DOF Undersecretary for international finance, Rosalia de Leon, said they are reviewing the list of program loans for 2010, which would include the World Bank’s $250 million Development Policy Loan and the Japan International Cooperation Agency’s own $250 million policy support program co-financed with the Asian Development Bank (ADB).

What has not been programmed but are expected to come in later in the year are additional program loans from the ADB and the World Bank as they realigned funding to suit the national program support for several projects such as conditional cash transfer loans.

Last year the DOF said ODA program loans totalled $1.5 billion, $300 million more than original estimate of $1.2 billion.

The proposed Samurai bonds of up to $1 billion, in the meantime, has been guaranteed by the Japan Bank for International Cooperation.