Government to raise share of local borrowings

MANILA, Philippines - The Aquino administration is eyeing to raise the share of its local borrowings to 82.8 percent by 2016, documents from the Department of Finance (DOF) showed.

The move is part of efforts to lessen the foreign component of the government’s debt as a means to cushion the economy from foreign exchange fluctuation.

The programmed borrowing mix for next year is 75 percent and 25 percent, in favor of domestic sources. The 25 percent will come from foreign loans.

The government is eyeing to borrow P757.75 billion from the local and foreign debt markets next year, according to the program.

Of the P757.75 billion, the government is planning to raise P567.95 billion from the cash-rich domestic market through the issuance of Treasury bills (T-bills) and bonds.

The remaining P189.9 billion, meanwhile, will be sourced from the foreign creditors, according to the borrowing program.

The borrowing mix will gradually shift from 2013 to 2016, Finance data further showed.

In 2014, the government hopes to borrow 76.4 percent from the domestic market and 23.6 percent from the foreign debt environment.

This as the government hopes to borrow a total of P757.098 billion in 2014.

Of the amount, the government will borrow P578.748 billion from local investors through the issuance of T-bills and bonds. The remaining P178.350 billion will come from foreign sources.

In 2015, the government will borrow 77.6 percent from the domestic market and 22.4 percent from foreign sources.

Total gross borrowing for 2015 is P796.629 billion, of which the government will borrow P618.279 billion from domestic investors.

The foreign borrowing program for 2015 will stay at P178.350 billion.

In 2016, the domestic component of the government’s total borrowing will account for 82.8 percent while the share of the foreign component will narrow to 17.2 percent.

In a separate interview, Finance Undersecretary Rosalia de Leon said the actual borrowing program per year and the borrowing mix could still change.

 “It could still change but that is the program that we want more or less,” said De Leon.

The Aquino administration has been trying to borrow more from the domestic market to take advantage of the “very liquid” local market and to cushion the economy from the impact of foreign exchange fluctuation.

De Leon said that while the government wants to borrow more the domestic market, it wants to continue tapping the foreign debt market to keep itself on the radar screen of foreign creditors.

The government borrows from the local and debt market to finance its budget deficit. It has been trying to boost revenues and at the same time improve the level of spending to stimulate the economy.