09 Feb 2021, 10:36 am
The Philippines has set an aim to raise $23.71 billion from external funds to cover the budget deficit and finance infrastructure projects, according to its finance department (DOF).
$8.06bn will be for budget support and $15.65bn will be for project financing. DOF plans to secure $7.67bn in loans and grants from multilateral institutions, $10.54bn from bilateral sources and $5.5bn from commercial markets.
In 2020, the government secured $7.73bn from multilateral lenders, $2.86bn from bilateral sources and $6.47bn from commercial markets, in total at $17.06bn, which was around 39% lower than the figure planned for 2021.
Finance undersecretary Mark Dennis Joven said that total external financing contracted for infrastructure projects under the “build, build, build” programme was $1.62bn, which is nine times less than the DOF’s planned figure.
Infrastructure expert John Yeap of Pinsent Masons, the law firm behind Out-Law, said: “Infrastructure development is fundamental to economic development and the Republic of Philippines has historically been successful in drawing long term capital for infrastructure such as power and transportation. ”
“Much, however, remains to be done, as witnessed by the president’s ‘build build build’ programme. For so long as Covid-19 plagues our nations, major infrastructure spend will be challenging, but economic development has to continue and the capital-raising announced by the DOF should give some encouragement for some of the more critical infrastructure initiatives,” he said.
Philippines' president Rodrigo Duterte in December signed the 2021 national budget of P4.504 trillion ($93.76bn) that was the largest ever budget, granting P1.3231tn to projects under the 'build, build, build' programme.