NextGen Day

MANILA, Philippines — For the government to reduce debt accumulated as a result of the coronavirus outbreak in 2019, the Philippine economy must expand faster than its pre-pandemic level of roughly 6%. (Covid-19).

Finance Secretary Carlos Dominguez III said there is no problem repaying the debt incurred during the pandemic because it has advantageous interest rates and periods, which are approximately 40 years, in an interview with Bloomberg television on Thursday.

“The repayment isn’t a concern for us.” We must truly mature in order to be debt-free. In other words, over the next five or six years, grow our GDP by more than 6% every year,” he stated.

The Department of Finance (DOF) previously announced that it had received USD22.55 billion in budgetary support financing from the Asian Development Bank (ADB), the World Bank (WB), and the Asian Infrastructure Investment Bank (AIIB), among others, as well as USD3.25 billion in grants and loans financing for virus-related projects and programs.

The inter-agency Development Budget Coordination Committee (DBCC) has set the GDP target for this year at 7 to 9%, and for 2023-2024 at 6 to 7%.

The level of borrowings amassed as a result of the pandemic, according to Dominguez, is understandable given the necessity to expand financing amidst the loss in income due to the lockdowns.

“To get out of debt, the future administration will have to adopt programs and adhere to very tight fiscal discipline,” he said.

However, Dominguez stated that “everything is in place in the Philippines to achieve that,” highlighting the domestic economy’s recovery, which exceeded the government’s 5.5 percent objective for 2021 after expanding by 5.7 percent.

The impact of the Ukraine-Russia war, he said, is one of the year’s hazards.

While the Philippines is not directly harmed by the war, it is affected by the surge in oil and commodity prices on the worldwide market, according to Dominguez.

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