The recent Realtime Economic Issues Watch report by Washington-based think tank Peterson Institute for International Economics (PIIE) said developing countries such as the Philippines will need greater financing moving forward amid the COVID-19 pandemic’s uncertain duration and economic impact.
PIIE said low and middle income countries will need more funds to spur business activities even as global organizations and multilaterals are giving assistance.
“Many developing countries still require greater support to acquire and distribute vaccines and to address the economic fallout of the pandemic,” it said.
“With new viral variants emerging around the globe, these needs could well expand, exacerbating their financial problems,” PIIE added.
In the case of the Philippines, national government’s gross borrowings reached P2.74 trillion last year as the country ramped up financing for its pandemic response. However, the economy has yet to recover as quarantine restrictions, the world’s longest and strictest, have yet to be lifted, especially now that COVID-19 cases are surging anew, after one full year of ineffective government responses.
In 2020, the share of the country’s debt to gross domestic product expanded to 54.5 percent from the record low of 39.6 percent in 2019. The Department of Finance assures Filipinos that the country’s sovereign debt rating remains stable and would continue to have good access to external commercial borrowings and official development assistance. Additionally, PIIE said international financial architecture has evolved in response to prevailing economic difficulties, and it needs to do so again to help lower future risks and vulnerabilities.
With access to financing still available, the big question for the Philippines is what to do with it. Filipinos are yet to feel the impact of the trillions their government borrowed in their behalf last year, and with the situation turning progressively worse instead of showing signs of sustainable improvement, it begs the question of how much more money will we be borrowing as our nation continues to struggle in its pandemic response, further delaying any chance of economic recovery.
Greater financing would mean a better response and general outlook if government knew what it was doing with the available resources. Has our government learned anything over the past year that can allow our officials to make better use of the country’s resources?*