Gov't To Pursue Prudent Borrowing Strategy

Finance Secretary Carlos Dominguez III said Monday the Duterte administration will continue its sustainable and prudent borrowing strategy in 2021 and 2022 to support its COVID-19 response measures and economic recovery program while ensuring the government’s strong cash position amid the pandemic.

Photo Insert: Finance Secretary Carlos Dominguez III

This debt management strategy that President Duterte has pursued long before the pandemic struck last year has allowed the government to reverse his predecessors’ anemic spending on infrastructure and dramatically increase investments in social services to a three-year average that is higher than the combined average annual expenditure of the past four administrations, Dominguez said.

As a result, Dominguez said the government was able to bring down poverty incidence t0 16.7 percent in 2018 from 23.5 percent in 2015, which translates into six million Filipinos lifted out of poverty in the first four years of the Duterte presidency.

“Our financing programs for 2021 and 2022 reflect the same strategy. We will continue with our sustainable and prudent borrowing to fund both economic investments and the pandemic response,” Dominguez said.

“The financing also considers provisioning for buffers to ensure a strong cash position amidst the pandemic. With abundant liquidity in our financial system, we will continue borrowing more from our domestic sources,” he added.

Dominguez explained to legislators during this morning’s briefing by selected government officials before the House ways and means committee that incurring debt even during this pandemic is the right thing to do for the government if this will help fund the people’s needs and generate a higher level of economic activity necessary to keep the economy afloat.

“However, we must use our borrowings in a prudent manner. We should use them to beef up our health requirements and to generate productive economic activity. If we do not do these things, the economy will collapse even further. We have to spend wisely and that’s exactly what we have been doing,” Dominguez told the committee.

The committee chaired by Albay Rep. Joey Salceda held the briefing in relation to its deliberations on several bills seeking the creation of an oversight body to monitor and oversee the government’s borrowings–and possibly set a ceiling on the country’s indebtedness.

“Through the length of this pandemic, the Duterte administration never lost sight of the demands of fiscal responsibility,” Dominguez said.

He reiterated his call for the Executive Branch and the Legislature to work together to achieve a solid recovery from the pandemic “by keeping our deficit and debt ratios within reasonable levels,” so that the country’s finances will remain “in great shape for the next administration and the future generation of Filipinos.”

WEEKLY FEATURE : PAL READY TO SOAR WITH PANDEMIC