Enormous financial debt

THERE’S nothing wrong with borrowing as long as we can pay it. Loans are especially important if they are meant to fund urgent matters.
Our country is in the middle of a crisis brought by the coronavirus disease 2019 pandemic and it is running out of funds to respond to the outbreak.

Efforts to contain the spread of the killer virus and to provide the needs of millions of Filipinos affected by crisis are costly yet necessary.
We can’t blame the government if it resorts to availing loans offered  by global lenders like the World Bank (WB) and the Asian Development Bank  (ADB).

However, it should carefully manage loan availments as we don’t want to borrow what we can’t afford to pay.

The new loans recently availed by the government from the WB and the ADB increased its  total debt to a record high of P8.6 trillion in April this year.

According to the Bureau of Treasury (BTr), the figure represents a 1.5 percent or P122.89 jump from the P8.48 trillion in March.

In April, the government availed  a $1.5 trillion loan from ADB for the COVID-19 Active Response and Expenditure Program.

It secured  another $200 million loan from ADB for the Social Protection Support Project.

Likewise, the WB extended to government a $500 million loan for the Third Disaster Risk Management Development Policy Loan.

Another $100 million financing assistance for the COVID-19 Emergency Response Project of the Department of Health was extended by WB.

Thus, external debt  rose by 2.7 percent to P2.74 trillion from P2.66 trillion in the previous month.

On the other hand, domestic debt hit P5.86 trillion as of April, up from March level of P5.81 trillion.

The increase was driven by the net issuance of domestic government securities amounting to P50.82 billion to fund the government’s CoVid 19 response, BTr said.

Meanwhile, the Treasury said total outstanding debt also went up by 11.2 percent from the P7.73 trillion recorded as of end-2019 and by 10.4 percent from P7.79 trillion in April 2019.

The question now is can we as taxpayers repay this enormous financial debt?

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