COVID 19 WAR CHEST: $4.55 BILLION

The government has borrowed new foreign loans of  US$4.55 billion as of mid-May  to boost its Covid-19 war chest in providing relief to the most affected sectors.

This budgetary support financing for the COVID-19 emergency came from loans extended by the Asian Development Bank (ADB) and the World Bank, and the government’s issue of US dollar-denominated global bonds last month, according to the Department of Finance

Of the amount of US$4.55 billion, US$1.7 billion came from the ADB, US$500 million more was from the World Bank, and another US$2.35 billion was raised from the dual-tranche issuance of the Philippines’ global bonds, which fetched coupon rates of 2.45 percent for the 10-year and 2.95 percent for the 25-year, the lowest ever for a Philippine dollar bond in both tenors.

The World Bank also accelerated its disbursement of the US$200-million additional financing for the ongoing Social Welfare Development and Reform Project II to the Philippines, bringing the total amount for budgetary support financing sourced by the government from foreign loans for the COVID-19 response to US$4.75 billion.

In terms of project loan financing, the Philippines signed a US$100-million loan with the World Bank last April 28 for the government’s COVID-19 Emergency Response Project (ERP) that aims to strengthen the country’s capacity to prevent, detect and respond to the threat posed by the COVID-19 pandemic and boost its national systems for public health preparedness.

The DOF also raised an additional US$8 million in grant financing from the ADB to support two projects implemented by the Department of Health (DOH) and other government agencies dealing with the COVID-19 emergency.

These financing packages for budgetary support, project loan and grants amount to a grand total of US$4.858 billion secured as of May 14 by the DOF for the government’s COVID-19 response efforts.

The DOF’s update on these financing packages formed part of President Duterte’s seventh weekly report to the Congress on the use of the additional powers granted to him under Republic Act (RA) No. 11469 or the Bayanihan To Heal As One Act. #COVID19