MANILA, Philippines - The Arroyo administration has increased its borrowing for 2009 to P613.9 billion after it revised its budget deficit ceiling target from P172 billion to P199 billion in anticipation of a far worse slowdown in the economy.
The Department of Finance (DOF) said it has firmed up the revised borrowing program for 2009, marking an increase in official development assistance (ODA) as well as domestic borrowing.
Finance officials announced yesterday that the government has also revised its borrowing mix, increasing its planned foreign borrowing to 28 percent of total borrowing, from 25 percent.
The bulk of this year’s government borrowing will remain domestic, but the proportion would decline slightly to 72 percent from the previous level of 75 percent.
Finance Undersecretary Roberto Tan announced that the revisions in the borrowing requirement for this year stemmed from the increase in the deficit ceiling.
Government was also forced to raise the amount it had to borrow because revenues were declining this year, indicating that there would be no other way to finance the increase in its spending.
Tan said the government now plans to borrow P174.9 billion from foreign sources but explained the incremental foreign borrowing would come from official development assistance or ODA sources.
“These are slower than commercial borrowing but we are eyeing program loans that would be faster than project loans,” Tan said.
Finance Secretary Margarito Teves said the government is not ruling out more commercial borrowing as an option down the road but right now, he said the most attractive opportunities were in ODA sources.
“It’s not that we are relying on ODAs, there are just more and better opportunities now in that area, particularly with the Asian Development Bank,” Teves said.
On the other hand, the government’s domestic borrowing has also been increased from P439 billion to P442 billion that would be raised from the credit market in the form of government securities.