RP eyes $2 billion in foreign loans

MANILA, Philippines - The government is looking at borrowing $2 billion from foreign commercial creditors next year, higher than earlier planned to finance a wider-than expected budget deficit, National Treasurer Roberto Tan said yesterday.

The rest of the financing requirements for 2010 would be sourced from domestic sources. This would amount to P475.2 billion or roughly $9 billion, Tan said.

However, he stressed that the numbers could still change as these are constantly being reviewed.

“These are all emerging numbers. They are all subject to review,” he said in a telephone interview.

The emerging borrowing mix for 2010, meanwhile, is that 72 percent would come from domestic sources and 28 percent would come from foreign lenders.

This year, the government has so far raised $2.25 million from foreign commercial creditors after successfully selling $1.5 billion in dollar-denominated bonds last January and $750 million last month.

The government borrows from local and foreign sources to finance its budgetary requirements.

The Development Budget Coordination Committee (DBCC), the interagency group that sets the country’s macroeconomic assumptions, approved a wider deficit of P233.4 billion for 2010 from the previous program of P208 billion.

The DBCC also announced that the economy may grow anywhere from 2.6 percent to 3.6 percent in 2010, higher than the revised projected growth range for the year of 0.8 percent to 1.8 percent.

With gross domestic product (GDP) projected at a range of 2.6 percent to 3.6 percent for 2010, the DBCC approved a budget of P1.541 trillion for next year.

This is P115 billion or eight percent higher than the 2009 budget of P1.426 trillion and is consistent with the goal of reducing the budget deficit to 2.8 percent of GDP from 3.2 percent of GDP in 2009, the DBCC said.