MANILA - The government is set to disburse at least $900 million worth of loans from multilateral lenders towards the end of the year to help address the Philippines' worsening fiscal condition.

In an interview with reporters, National Treasurer Roberto Tan said the government is expecting the release of a $500 million credit from the Asian Development Bank (ADB) within September, and another $400 million from other lending institutions by December.

According to Tan, the $500-million ADB loan is part of the institution's counter-cyclical fund aimed to help the government plug its ballooning budget deficit. He did not give details on the remaining $400 million in loans set to be disbursed by year-end.

Statistics showed that program loans disbursed during the first 7 months of the year reached P21.31 billion, 53% higher than last year's P13.93 billion.

Of this amount, P9.622 billion came from the World Bank's International Bank for Reconstruction and Development for "Food Crisis Response," P7.056 billion came from ADB for the "Government Justice Reform," and P4.63 billion came from the Japan Bank for International Cooperation (JBIC) for the Development Policy Loan.

The government borrows heavily from both foreign and domestic creditors to address its widening budget deficit and pay its maturing debt. This year, the government has set a budget gap target of P250 billion or 3.2% of gross domestic product (GDP), a huge jump from P68.1 billion or 0.9% of GDP in 2008.

The country's borrowings reached P276.22 billion as of end-July, 16.7% lower than P331.78 billion in the same period last year. Domestic borrowings fell 52.4% to P135.88 billion from P285.62 billion, while foreign borrowings were up 204% to P140.35 billion from P46.16 billion. 

So far, the Philippines has raised $2.25 billion from foreign commercial borrowings this year by issuing $750 million in global-denominated bonds last month and another $1.5 billion in January.

Tan said the government is currently negotiating with the JBIC for a lower guarantee fee on the planned issuance of $1 billion in Samurai bonds to pre-fund the country's overseas borrowing requirement in 2010.