As of end-September, our budget deficit as a share of GDP stood at 8.3 percent. The ultimate challenge is how the national government can finance its soaring budget deficit without raising its costs of borrowing, which in turn could increase domestic interest rates.
As an extraordinary measure deployed only during extraordinary times, the BSP extended PHP540 billion (approximately $ billion) in direct provisional advances to the national government. In addition, we remitted PHP23 billion (approximately $ million) in dividends to augment the government’s pandemic war chest. To date, through its various measures, BSP has injected PHP2.3 trillion in liquidity into the financial system.