PH government seeks P300 billion loan from Bangko Sentral in 2022

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Filipinos wearing masks and face shields for protection against the coronavirus disease (COVID-19) walk along a street market in Manila, Philippines, December 3, 2020. (Reuters/Eloisa Lopez)

Finance Secretary Carlos Dominguez said, the Philippine government is seeking a P300 billion ($5.96 billion) loan from the central bank next year, which is less than this year’s budget support so the economy continues to recover.

The government has also informed the Bangko Sentral ng Pilipinas that it will repay its outstanding 540 billion peso provisional advances in full on December 10, 2022, ahead of the maturity date of January 12, 2022.

The new loan will have no interest, will be due in three months, and can be extended for an additional three months.

According to the Department of Finance, the smaller loan indicates that “we are on track with the unwinding of liquidity support on firmer evidence of return to economic strength,” citing Dominguez’s letter to central bank Governor Benjamin Diokno.

In a forum on Wednesday, Dominguez said that the government borrowings will start to decline in 2022 as revenue is expected to return to 2019 levels.

“This administration will make sure to help the next president and the next generations address the fiscal and economic risks brought about by the pandemic,” he said.

According to finance chief, the economic recovery has begun to take root as more businesses embark on a safe reopening as vaccination continues. Even with the threat of new COVID-19 variants, the Philippines’ healthcare system and vaccine stockpile will suffice to contain another surge in infection.

“We will solidify our recovery by reopening the economy to alert level one, hopefully by January 2022,” Dominguez said at the forum.

Furthermore, to push the reopening includes plans to resume face-to-face classes, increase public transport capacity to 100% and relax local and international travel restrictions.

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