Government readies P9 billion fund for fresh cash dole outs

by Elijah Felice Rosales (The Philippine Star), 24 Jun 2021

MANILA, Philippines — The government plans to use the nearly P9 billion borrowed funds from Japan to bankroll its remaining obligations in responding to the financial difficulties brought about by the recent revert to lockdown.

Finance Secretary Carlos Dominguez yesterday said the government would deploy 20 billion Japanese yen (about P8.71 billion) to deliver social amelioration program (SAP) in affected communities in Metro Manila and surrounding provinces.

The Japanese government on June 8 approved the release of the amount, the third of its kind, under the Post-Disaster Standby Loan (PDSL-2) signed with the Philippines.

The Philippines and Japan signed PDSL-2, a loan worth 50 billion Japanese yen, or around P23.3 billion, in September last year. The first two tranches of 10 billion Japanese yen were granted last October and January, respectively.

Dominguez had asked Tokyo to disburse 20 billion Japanese yen under PDSL-2 to increase Manila’s working capital in responding to the summer resurgence in COVID-19 cases.

“We hope to utilize the amount to be disbursed under PDSL-2 to support a portion of the total requirement for the implementation of the SAP and other mechanisms to properly implement COVID-19 response and recovery interventions in the country,” Dominguez said.

The government distributed cash assistance up to a maximum of P4,000 per family to residents of areas that reverted to lockdown from March 29 to April 11.

As obligations pile up with the nation’s capital placed under lockdown, Dominguez said he saw the need to request for another disbursement from PDSL-2.

Under the agreement, the Philippine government can ask for funding from the PDSL-2 in events of a state of calamity or a state of public health emergency. The loan allows for disbursements in multiple tranches within three years and may be extended for another three years.

The loan matures in 40 years, with a grace period of 10 years. In signing the deal, Dominguez said Japan awarded the borrowing based on its longstanding trust on the Philippines.

As of April, the government has sustained an outstanding debt of P10.99 trillion, of which P3.17 trillion came from external sources.

Broken down, P1.38 trillion of the external debt originated from loans signed by the government with foreign agencies.