Department of Finance (DOF) Secretary Sonny Dominguez disclosed Monday that he wrote a letter to the Senate explaining the “financing last year and for the Coronavirus Disease 2019 (COVID-19) vaccines”.
In President Rodrigo R. Duterte’s public address, DOF Sec. Dominguez pointed out that the collected revenues of ₱3.1 trillion from 2019 dropped to ₱2.86 trillion due to the lockdown forced by the sudden outbreak of COVID-19.
“Bumaba ho ‘yan sa ₱2.86 trillion in 2020 kasi nag-lockdown tayo. Bumaba ‘yong business transactions, therefore ‘yong income ng mga tao bumaba so ang taxes na na-collect natin was lowered. (It dropped to ₱2.86 trillion in 2020 because of the lockdown. The business transactions have been limited, therefore people’s income have gone down so our collected taxes were lowered).”
Sec. Dominguez further revealed that the country’s expenses have ballooned from ₱3.8T in 2019 to ₱4.23T in 2020. The distribution of the Social Amelioration Program (SAP) factored in the expenses with almost ₱250 billion and hospital expenses such as PPEs also contributed to the expenditures.
From the country’s deficit of ₱66 B or 3.4% of the Gross Domestic Product (GDP) from 2019, the figure has amplified to ₱1.37T or 7.6% in 2020.
“Now, in 2019 we only borrowed ₱1 trillion pesos. However, sa (in) 2020 we borrowed ₱2.7 trillion. The first part of the borrowings was to cover the deficit so that we could spend the ₱4.23. So we borrowed ₱2.74 trillion. So we borrowed more because we had more projects that we were still funding like the Build, Build, Build, the different bridges we were starting, so we borrowed more,” he added.
The DOF Chief shared that due to the lowered interest rate in 2020, the government borrowed money to pay off the old debt.
“So therefore, at the end of 2019, our debt-to-GDP was only 39.6 percent, now it’s 54.5% and that is caused mainly or solely by the COVID crisis .In 2021, our revenues will be more or less flat as compared to 2020. It’s only ₱ 2.88 trillion. Our expenditures will be higher to 4.66 because we are spending more for healthcare, more for Build, Build, Build and salaries of government. So our deficit is going to go up from ₱1.37 trillion to ₱1.78 trillion.”
“So we will borrow this year around 3 trillion pesos, a little more than 2020. That is the plan. This is approved in the budget. Approved na ho ‘yan sa budget na prinesent natin (That has already been approved in the budget we presented),” he further disclosed.
Sec. Dominguez then showed that the total financing sources of ₱82.5B for the vaccines are composed of the Department of Health (DOH) budget, the Bayanihan 2 budget, financing from the World Bank, Asian Development Bank, and the Asian Infrastructure Investment Bank, and from the country’s “savings”. He reassured that the money is still in the bank for the meantime while the vaccines are still not delivered, and that payment is not yet due. -NGS, PTV News Online
