MANILA, Philippines – Finance Secretary Carlos Dominguez III is prepared to raise the Philippines’ debt ceiling to fund efforts against the coronavirus pandemic.

Dominguez was asked in a Bloomberg interview if the government is considering raising the budget deficit to as high as 5.4%.

“We are prepared to increase our debt levels,” Dominguez said, noting that the debt levels depend on how long the Luzon-wide lockdown will drag on.

The finance chief said the budget deficit could increase to around 3.6%, higher than the programmed 3.2% of the gross domestic product (GDP) or around P667.6 billion.

The government debt is likely to exceed 41% of GDP in 2020. The country’s economic managers initially intended to bring down the debt-to-GDP ratio to 39% by 2022.

With this, Dominguez said the government’s dreams of getting an A rating from credit watchers by 2022 has been set aside in favor of people’s needs.

Getting the highest credit rating means that the government is able to prove to lenders that it can pay up, which in turn translates to lower interest rates.

The Duterte administration is seeking a $1-billion loan from multilateral lenders on top of the massive budget realignments. (READ: Duterte signs law granting himself special powers to address coronavirus outbreak)

Dominguez said talks are “going well,” without revealing the source of the funding.

He added that the government is ready to “tap all markets at this point.”

The economic team has yet to provide a detailed breakdown of how the funds will be spent. – Rappler.com