NextGen Day

MANILA, Philippines – Finance Secretary Carlos G. Dominguez III expressed confidence that the country’s strong macroeconomic fundamentals will allow the local economy to continue to improve despite foreign uncertainties.

Dominguez said the national government has decreased the amount of bridge financing from the Bangko Sentral ng Pilipinas (BSP) from USD10.8 billion (PHP540 billion) to USD6 billion in an interview with CNBC on Friday (PHP300 billion).

He stated, “We intend to pay this off by June of this year.”

Since 2020, the national government has asked the BSP for funding accommodation to increase money allocated to pandemic-related projects.

In March of that year, a PHP300 billion short-term repurchase deal was signed, and it was repaid by September.

Three PH540 billion bridge funding proposals were also submitted, and the BSP’s policy-making Monetary Board authorized them in October 2020, January 2021, and July 2021, respectively.

The national government requested a PHP300 billion interim advance in January of this year, which authorities said was a sign of improved public finances.

The New Central Bank Act, or Republic Act 7653, permits the BSP to provide the national government with provisional advances equal to 20% of its average revenues in previous years.

Authorities are on the alert for external factors that could have an impact on the global economic recovery, such as the Federal Reserve’s key rates, which are expected to be raised by as much as 50 basis points this year, beginning next month.

In terms of the government’s exit strategy, Dominguez said officials are “very closely observing the developments of interest rates internationally.”

“However, due to its strong macroeconomic fundamentals, we are convinced that the Philippines will be able to weather external headwinds.” As a result, we’ve already started the disengagement and normalization process,” he continued.

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