The Duterte administration has borrowed P741.59 billion from foreign creditors last year for the country’s coronavirus response, the Department of Finance (DOF) said.

Data from the DOF’s International Finance Group (IFG) showed that the government has contracted a total of $17.06 billion, roughly P819.46 billion, from external sources in 2020.

Of the total figure, the DOF said $15.44 billion, or P741.59 billion was earmarked for the emergency requirements for COVID-19 response. The remaining $1.62 billion was for other initiatives including “Build, Build, Build” infrastructure projects.

 Finance Undersecretary Mark Dennis Joven said the DOF secured $7.73 billion or 45.3 percent of the amount from multilateral lenders, $2.86 billion (16.7 percent) from the Philippines’ bilateral partners, and $6.47 billion (37.9 percent) from the commercial markets. 

  Joven said $14.52 billion in budget support financing was contracted by the DOF to help cover the deficit of P1.38 trillion resulting from the reduced collections of revenue agencies and the massive spending requirements of COVID-19 response programs. 

The remaining amount of $2.54 billion in project loans was negotiated by the IFG to support the government’s key projects that will be implemented over several years starting in 2020, Joven said. 

 Of the $14.52 billion, a total of $8.05 billion came in the form of Official Development Assistance (ODA) financing and another $6.47 billion from funds raised in the overseas bond markets, Joven said. 

“Because of a higher emergency funding requirement in light of COVID-19, the amount of external financing contracted in 2020 increased by 75.43 percent year-on-year,” Joven said in his report to Finance Secretary Carlos G. Dominguez III.

 “This also represents an overall 33 percent expansion of the external borrowing program from 2016 to 2020,” Joven noted. 

 He, however, said that in securing financing from external sources, the DOF has always maintained “its bias towards cheaper and multilalateral loans.” 

  “The government has consistently availed debt for budget support, recognizing that program loans and global bonds provide more flexibility in terms of utilization,” he said. 

  Aside from loans, the IFG also processed grants and technical assistance amounting to $859.53 million last year, of which $26.74 million is intended for COVID-19 response. 

  “In 2020, the IFG also facilitated the provision of various donations, such as testing kits, masks, personal protective equipment (PPEs), ventilators, face shields, and others, from China,” Joven said. 

  For 2021, Joven said the IFG is targeting to secure a total of $23.71 billion in financing from external sources to bridge the budget deficit and provide funds for priority projects. 

   Of the amount, $8.06 billion (34 percent) will be contracted for budget support purposes, while $15.65 billion (66 percent) will be for project financing. 

    “We are planning to source a total of $7.67 billion in loans and grants from multilateral institutions, US$10.54 billion from our bilateral partners; and raise $5.5 billion from the commercial markets this year,” Joven said.