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Monday, May 27, 2019

Finance department targets $1.8-B loan for dev't

THE Department of Finance (DOF) targets to incur a total of $1.8 billion official development assistance (ODA) loans for 2018.

During the 4th Davao Investment Conference (Icon) held at SMX Convention Center, SM Lanang, Saturday, July 23, Finance Secretary Carlos Dominguez said the amount will be used to implement key big ticket infrastructure projects of the country.

He said the country is currently targeting a financing mix of 80 percent domestic borrowing and 20 percent foreign.

“The preference for peso-denominated financing has altered the country’s debt portfolio. At present 67.1 percent of the country’s debt portfolio is peso-denominated. This is a significant improvement in the 58.1 peso-denominated debt in 2010,” Dominguez added.

He said this target reduces the currency risk while helping deploy the excess liquidity in the country’s financing system.

Dominguez also said, despite the country’s ODA loans, they are still expecting that the National Government debt to gross domestic product (GDP) will improve from the current 42 percent to only 37 to 38 percent once the first package of the tax reform has been passed.

He also assured that the administration’s infrastructure program, which involves the implementation of the five-package tax reform program, will not add to the country’s current debt loan.

“This will not bring us close to a debt crisis. Fiscal prudence will continue to rule the day. We will build vital structure that our economy needs desperately. We have a lot of catching up to do with our neighbors but we assure you that you can count on this administration to move aggressively in building these infrastructure. These investments after all will be the principal driver of growth in the near future. These projects will create millions of jobs and lower transport and logistics cost,” he said.
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