The government needs to borrow some $1.5 billion from foreign sources to help finance the expected budget deficit of P62.5 billion for this year, Finance Undersecretary Joel Banares said yesterday.
He said of the $1.5 billion financing requirements, the government has identified official loans such as the $300- $500 million loan from the Japanese government under the Miyazawa initiative.
However, Banares said the loans are still being negotiated and is still uncertain if the Japanese government will approve the government's request.
"It is also not yet clear if the government will issue a Samurai bond which will get some guarantee from the Japanese government or if there will be a loan syndication or placement," Banares said.
Newly appointed Finance Secretary Jose T. Pardo is wary about any further borrowings especially since the government may already be precariously near its foreign borrowing ceiling.
Pardo said he will review all the financing programs of the government for this year.
Government is expecting inflows this year from the Asian Development Bank and the World Bank.
However, sources said the release of the remaining tranche from World Bank under the Bank Sector Reform Loan (BSRL) may be held back due to the recent change in the government's economic team.
Pardo vows to reassure foreign creditors and multilateral financial institutions that the Estrada Administration is back on track.