Borrow more to fund COVID response, shore up economy, gov’t urged

Published July 15, 2020, 2:20 PM

by Hannah Torregoza 

Two senators on Wednesday said the government should borrow more money to continuously fund its response to the COVID-19 pandemic and shore up the economy.

Senate President Pro Tempore Ralph Recto said he supports the proposal and urged State economic managers to consider it while interest rates are still very low.

“I’m okay with additional borrowings, while rates are still very low. All countries will be borrowing anyway to finance increasing deficit. It’s relative,” Recto said.

“We can increase our borrowings without affecting our credit rating if we spend it properly by improving our ability to combat the virus (health infrastructure) and investing on critical infrastructure (roads, bridges, ICT , green economy etc.) that creates jobs and improves our competitiveness in the long run,” Recto added.

Recto said the government should use its good credit standing to take advantage of credit financial facilities available.

“What good is having a good credit rating if we don’t use it? Let’s use it wisely,” he said.

Senate Minority Leader Franklin Drilon also agreed with the proposal, reiterating that the country needs as much money to spruce up the economy and at the same time address the current health crisis.

“Remember that during this pandemic, our tax collection went down, and therefore, we have no funds,” Drilon said during the Kapihan sa Manila Bay online forum.

“But that’s accepted. That is why there is a push to have more funds through borrowings because we really have no other choice,” Drilon said.

The Department of Finance (DoF) had earlier said COVID-19 related borrowings have so far reached $4.83 billion and these have been disbursed for State programs aimed at containing the spread of the pandemic.

Among the financial institutions that extended loans to the Philippines are the Asian Development Bank (ADB) with $2.6 billion, the World Bank (WB) with $1.2 billion, the Asian Infrastructure Investment Bank with $750 million, and Agence Française de Développement with $275.7 million.