By Joann Santiago
MANILA, July 28 (PNA) — Improving fiscal space continue to show its benefits on the Philippines as it further lessened the government’s reliance to foreign borrowings as showed in the proposed 2016 national budget, which the Aquino administration submitted before Congress Tuesday.
In his budget message, President Benigno Aquino III said they plan to borrow Php 674.8 billion next year, lower than the Php 700.8 billion for 2015.
He said the proposed borrowing program for next year will finance the government’s Php 308.7 billion budget gap, will amortize Php 347.7 billion of maturing outstanding liabilities, and maintain sufficient cash.
“This will enable us to further reduce our debt stock to 41.8 percent of GDP (gross domestic product) by end-2016,” he said.
The Chief Executive said they have laid the way to help the next administration further improve the government’s fiscal condition by reducing borrowing cost and lessening risks from foreign-denominated liabilties.
“If the succeeding administration sustains our commitment to fiscal consolidation, it can further reduce the debt stock below 40 percent of GDP by its second year in office” he added.
Relatively, Budget and Management Secretary Florencio Abad said proportion of foreign borrowings to those to be sourced from on-shore creditors next year would be 85-15 with a bias on domestic fund sources.
This is a slight improvement from this year’s 84-16 ratio.
Abad said bulk of the borrowings would be used for amortization amounting to Php 347.7 billion and financing, Php 327.1 billion. (PNA)