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No need to boost BSP borrowings for now

Carlos Dominguez
Finance Secretary Carlos Dominguez

Finance Sec. Carlos Dominguez III is discounting the need to take additional borrowings from the Bangko Sentral to boost public financing, citing that the government is now banking on its various fiscal programs.

“At this point in time we don’t see any need to do so,” he said in an interview.

Dominguez said the government currently has a P540-billion provisional advance from the BSP, which the BSP’s policy-making Monetary Board approved last October.

This is on top of the P300 billion that the BSP extended to the national government last March through a repurchase deal, which has been fully redeemed.

Under this deal, the central bank bought government securities, which the Bureau of the Treasury has to redeem within three months, although there was a clause in the agreement that payment period may be extended for another three months.

The BSP Charter allows it to extend cash advance to the national government, but the amount should not exceed the government’s average revenues in the last three years, which, to date, is P540 billion.

The Finance chief said the government “still have some reserve amounts with the central bank and with our other creditors”.

“And we’re just waiting to see if we will need them depending on how long this contagion is going to last. But as I said with the development of safe and effective vaccines by next year (and with) their availability we see no need to get out of the normal loan programs that we have planned,” he added.