Outgoing BSP Gov Diokno: Govt Will Depend on Domestic Borrowing

Outgoing Bangko Sentral ng Pilipinas (BSP) Governor and incoming Department of Finance (DOF) Secretary Benjamin E. Diokno has stated that the government plans of relying on domestic borrowings to soften the blow of currency fluctuations on the national debt will continue. 

“We will be opportunistic. So if there’s a good opportunity to borrow in foreign currency, we will do that; but right now, our bias is to rely on domestic borrowing,” says Secretary Diokno. 

On the other hand, Secretary Diokno says that compared to other currencies, the peso still remains “competitive” and its weakening should not be of concern. 

In the DOF turnover ceremony, Sec Diokno said that he will keep the country’s GDP-to-debt ratio at a “sustainable threshold” all while balancing the economy’s economic recovery. 

Recently, the DOF under the term of Sec. Dominguez,  released its proposed fiscal consolidation and resource mobilization plan aimed at generating an average of around ₱350 billion annually from the years 2023 until 2027 in order for the Philippines to quickly outgrow its debt. 

The three-package fiscal consolidation and resource mobilization plan also incorporate additional taxes and the three-year deferment of the second tranche of reduction in personal income taxes. Value-added tax (VAT) has been expanded and also reduced in this proposal. 

Agricultural goods, education, health, raw food, and the finance sector are among the areas not included in the VAT expansion. 

By the end of April, just two months before then-President Duterte steps down, the national government’s debt grew to yet another record-high at ₱12.76 trillion.

Source: Business Mirror