MANILA, Philippines - The government may tap the foreign commercial debt market as early as January, depending on market conditions, National Treasurer Roberto Tan said yesterday.
Tan, however, stressed that nothing is final yet and that the government team in charge of the foreign commercial borrowing would be opportunistic with its decisions.
“It will be opportunistic and it (government) will have to evaluate if market conditions are ripe at the time,” Tan said.
When asked if the government would again proceed to borrow in January ahead of other issuers, as it has done for the past several years, Tan said it’s possible. “If the (government) thinks it’s the best time to go, then we will go,” he said.
He said nothing is final yet as the government is still assessing market conditions.
“It’s to keep our presence in the market and also provide updated pricing of foreign issues,” Tan said.
However, he added that the government would be looking into proposals for next year’s borrowing needs.
The government plans to borrow $4.02 billion externally next year, lower than the programmed $4.5 billion this year, according to the latest data from the Department of Finance (DOF).
Of the $4.02 billion, the government plans to borrow $2.25 billion from the commercial debt market and to borrow $1.77 billion worth of program and project loans.
Tan said there are no plans for now to change the borrowing program for next year, which has a proposed mix of 75 percent and 25 percent, in favor of domestic sources.
In January, the Philippines raised $1.25 billion from the sale of peso-denominated bonds and another $1.5 billion from a global bond sale in March.
The government borrows from the local and overseas debt market to plug its budget deficit which is projected to hit roughly P300 billion this year or 3.2 percent of gross domestic product (GDP) from P314.4 billion last year or 3.7 percent of GDP.