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[MANILA] The Philippine government plans to ramp up borrowing from both local and foreign sources to 889.7 billion pesos (S$24.6 billion) next year to help finance higher spending and pay off debts, documents from the Bureau of the Treasury showed.
That amount is 22 per cent higher than this year's revised borrowing plan of 727.6 billion pesos, with the government of President Rodrigo Duterte looking at a 12 per cent increase in next year's spending budget to 3.77 trillion pesos.
Of the total borrowing plan next year, 711.77 billion pesos, or 80 percent, will come from the domestic debt market while the balance of 177.94 billion pesos will come from foreign creditors.
The budget deficit is expected to rise to 523.6 billion pesos next year, or 3.0 per cent of the gross domestic product, from the planned 481.91 billion pesos this year, also equivalent to 3 percent of GDP, the document showed.
Manila is looking to keep the 80-20 borrowing mix until 2022, when Duterte's six-year term ends and when government borrowing is programmed to reach about 1.21 trillion pesos.
Government borrowing is set at 1.04 trillion pesos in 2019, 1.1 trillion pesos in 2020, and 1.22 trillion pesos in 2021, the document showed.
The Duterte administration is banking on tax reform measures to generate revenue to fund a multi-billion dollar infrastructure programme and keep the annual budget deficit at 3 per cent of GDP until 2022.
From 5.4 per cent of GDP this year, infrastructure spending is expected to rise to 7.4 per cent by 2022.
The government is pinning growth plans on infrastructure projects to create jobs, lift economic growth to as much as 8 per cent, and attract foreign investors put off by high power prices and transport bottlenecks that eat into profits.