THE balance of manageable debt and robust foreign reserves will help the economy survive headwinds from domestic uncertainties, but not without any difficulties, Finance Secretary Carlos Dominguez 3rd said on Wednesday.
That was how Dominguez replied to the query of Senator Gringo Honasan during a Senate hearing on how the country could fare economically should the situation surrounding the West Philippines Sea, the government’s anti-drug campaign, and the peace talks take a turn for the worse.
“Speaking from the finance point of view, our balance sheet is very strong. Our total debt is only $77 billion. Our total foreign reserves are $86 billion. We have enough for 10 months of imports of goods and services. So we will survive definitely,” he said.
However, the Cabinet official pointed out that while the economy is in good shape, could be difficulties in a scenario where everything went wrong.
“We have to tighten our belts. But we do have enough financial resources to survive close to a year of extreme difficulties,” he said.
Dominguez noted he was not dismissing the view that the recent pronouncements of President Rodrigo Duterte against the United States, United Nations (UN) and the European Union (EU) might have some repercussions on official development assistance (ODA).
The combined ODA from the US, UN and EU is around $3 billion.
“I am not the foreign affairs minister, but I would say that yes there is some logic to what you are saying,”
Dominguez said in response to Senator Franklin Drilon who asked if the government is putting in danger the ODA.
However, the National Economic and Development Authority is confident that the US and EU are about to pull the plug on ODA.
Socioeconomic Planning Secretary Ernesto Pernia said the ODA grants will stay. “They will not pull out,” Pernia noted, but did not elaborate.