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The Department of Finance (DOF) has so far obtained nearly $ 10 billion in loans and grants from foreign lenders to fund the government’s response to Covid-19.
Finance Secretary Carlos G. Domínguez III told senators on Wednesday that total government-secured funding for its Covid-19 efforts reached $ 9.9 billion (or roughly more than P480 billion) as of 15 of September.
“With our historically high credit ratings, we are quickly accessing emergency financing from our development partners and commercial markets at very low rates, tight spreads and longer repayment periods,” Domínguez said at the Senate Finance Committee hearing on Finance Department’s proposed 2021 budget, with new allocations amounting to just P16.01 billion, its lowest level since 2017.
According to Domínguez, “these loans will help cover our income deficit derived from the slowdown in economic activity due to the blockages.”
Finance Undersecretary Mark Joven told BusinessMirror that the updated list already included Phase 2 of the newly secured $ 458.95 million or 50 billion yen Post-Disaster Standby Loan from the Japan International Cooperation Agency (Jica) and the $ 500 million loan for the ADB Asian Development Bank disaster reserve facility).
Of the total funding secured by the government, the majority came from the ADB with budget support of $ 3.80 billion. This was followed by financing obtained from the issuance of $ 2.35 billion in dollar-denominated global bonds and budget support from the World Bank, for $ 1.2 billion. .
The remainder came from budget support from Jica ($ 917.9 million), Asian Infrastructure Investment Bank ($ 750 million), loans for specific Covid-19 projects ($ 595 million), budget support from the Agence Française de Développement ($ 275.70 million) and grants for COVID -19 specific projects ($ 26.36 million).
At the end of August, Domínguez said that total revenue collection reached P1.9 trillion, down 8 percent compared to the same period last year.
“86% of the income came from the collection of taxes, which registered a negative growth of 12%. We are optimistic that tax collection will improve in the coming months as we gradually reopen the economy, ”he said.
Patrimonial tax amnesty
At the same hearing, Domínguez said that “they are not in favor” of the bill that extends the period of acceptance of the amnesty of the wealth tax.
The Undersecretary of Finance, Antonette Tionko, who heads the DOF’s Revenue Operations Group, was concerned about the timing of the extension of the validity period for the wealth tax amnesty.
“In general, what we would have preferred for the amnesty law, since it was already passed, was to put it into practice first instead of, you know, having the deadline approaching maybe next year and then you already extend it, so I think that the timing is more the problem… ”Tionko said.
Last week, the House of Representatives passed the bill that extends the validity period of the inheritance tax amnesty from two to four years. Now he awaits Senate approval.
This was done in an attempt to accommodate more taxpayers, as House Ways and Means president Joey Sarte Salceda said that only 23,911 people have benefited from the amnesty, earning just P1,362 billion out of the P6 billion. potentials.
Budget DOF
Meanwhile, Domínguez also presented the DOF’s 2021 budget project to senators. While the DOF’s budget under Duterte’s administration has declined steadily since 2017, Domínguez said the department continued to raise record amounts of revenue to support the implementation of priority government programs and effectively fulfill its mandate of prudent management of the finances of the country.
The Senate finance committee, chaired by Senator Sonny Angara, endorsed the DOF’s proposed budget for approval in plenary after just 80 minutes of cross-examination by various senators.
