PH foreign loans, grants for COVID-19 response reach $4.86B as of mid-May

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Metro Manila (CNN Philippines, May 31) — The Philippines has acquired a total of $4.858 billion (about ₱246 billion) from foreign institutions and commercial markets as of mid-May to help fund its response to the coronavirus pandemic, the Department of Finance said on Sunday.

Of the amount, $4.55 billion was made through newly contracted foreign loans "extended by the Asian Development Bank (ADB) and the World Bank, and the government’s issue of US dollar-denominated global bonds last month," the agency said in a statement.

$1.7 billion of the amount came from the ADB, while $500 million was lent to the country by the World Bank. The remaining $2.35 billion was raised from "the dual-tranche issuance of the Philippines’ global bonds, which fetched coupon rates of 2.45 percent for the 10-year and 2.95 percent for the 25-year, the lowest ever for a Philippine dollar bond in both tenors," the DOF added.

These are on top of the $200-million additional financing the World Bank had provided for the ongoing Social Welfare Development and Reform Project II to the Philippines, which brings the total amount for foreign-sourced budgetary support financing for the government's COVID-19 response to $4.75 billion.

The DOF also mentioned the $100-million loan the Philippines had signed with the World Bank last April 28 for the government's COVID-19 Emergency Response Project, along with the $8 million the agency had raised in grant financing from the ADB. This is in support of two projects implemented by the Department of Health and other agencies handling the coronavirus crisis, it added.

"These financing packages for budgetary support, project loan and grants amount to a grand total of US$4.858 billion secured as of May 14 by the DOF for the government’s COVID-19 response efforts," the agency explained.

A few days ago, the World Bank and the ADB had approved another set of loans amounting to $25 million and $400 million, respectively. On Friday, the China-led Asian Infrastructure Investment Bank had approved a $750 million loan as well.

Finance Secretary Carlos Dominguez III had cited President Rodrigo Duterte's "saving-for-a-rainy-day" economic management approach for gaining the trust and confidence of the world’s most respected credit rating agencies and development partners, allowing the country "to borrow money at lower interest rates and longer repayment periods."

On Saturday, S&P Global Ratings maintained its "BBB+" credit rating for the Philippines and its stable outlook for the country's economy despite slowing down this year due to the COVID-19 crisis.