DOF prefers present borrowing mix

The Department of Finance (DOF) prefers to keep the current borrowing mix unchanged as it plans to focus on tapping official development assistance (ODA) loans from multilateral lenders, a ranking official yesterday said.

The government had planned to borrow 70 percent of its financing needs from domestic sources and 30-percent offshore.

However, in recent weeks officials said that the Finance department may go back to its previous borrowing program of sourcing 64 percent of the borrowing requirements locally and 36 percent from foreign sources.

“Our proposal will probably not involve a major change in the borrowing mix,” Finance Undersecretary and Acting National Treasurer Roberto Tan told reporters yesterday.

Tan said the focus now is to maximize the government’s ODA loans.

“We’re trying to pursue our ODA window… That is our focus,” Tan said.

The government has programmed to borrow $1.5 billion in ODA loans this year or $900 million for program loans and $600 million for project loans.

The interagency Development Budget Coordination Committee (DBCC) is set to meet on Wednesday to approve proposed revisions on the country’s macroeconomic assumptions and on the borrowing mix.

Earlier, Finance officials said that the government may again borrow $500 million from the international debt market if it increases the overseas portion of its planned borrowings.

Tan said it was too early to close the doors on more foreign borrowings for the year as this would depend on the needs of the government.

The Philippines has already borrowed $500 million this year through a global bond offering in January.

Every year, the National Government has to borrow to refinance maturing obligations. Maturing foreign obligations are normally paid in dollars and since it is still in deficit, the government ordinarily borrows offshore to meet these obligations.