Phl to sell P135-B debt papers

MANILA, Philippines - The Philippines plans to sell P135 billion worth of debt papers in the last three months of the year.

The Bureau of Treasury said it would issue P60 billion worth of 91-day, 182-day and 363-day Treasury bills and P75 billion three, five and seven-year Treasury bonds from October to December this year.

T-bills provide a relatively risk free investment alternative since it carries the full and unconditional guarantee of the government.

The government had planned to raise P135 billion  in the third quarter but raised only two-thirds of the amount after it rejected some bids for being unreasonably high.

For this year, the government has programmed to  borrow P715 billion, of which P620 billion will come from the domestic market.

The government’s program for the borrowing mix for 2014 is 85 percent for domestic and 15 percent for foreign.

The government regularly holds auctions of securities to help fund the country’s budget and pay maturing obligations.

The government plans to continue to rely more on domestic sources than on foreign creditors to avoid substantial exposure to foreign exchange risks.

Foreign borrowing was limited to loans from development institutions such as the Asian Development Bank, the World Bank, and Japan International Cooperation Agency.

For  2015, the government intends to borrow P700.8 billion from both domestic and foreign sources. The amount represents a four percent decline from the P730.03 billion planned borrowings  this year.

Of the P700.8 billion, P606.1 billion will come from the domestic market and the remaining P95.7 billion from foreign lenders. This would be equivalent to a borrowing mix of 86:14 in favor of domestic credit.

The bulk of external gross borrowings or P54.4 billion will comprise program loans while P32.6 billion will be in the form of bonds and P8.7 billion in project loans.