Government to borrow $3.5 billion from offshore markets

MANILA, Philippines — The government is planning to raise $3.5 billion next year through commercial borrowings in offshore markets, according to the Bureau of the Treasury (BTr).

In an interview, National Treasurer Rosalia De Leon said offshore commercial borrowings are programmed to reach $3.5 billion by 2020, lower than this year’s $3.7 billion.

“We’re looking at about $3.5 billion for commercial borrowings. This is only commercial, it does not include ODA (official development assistance) program and project loans,” De Leon told reporters.

De Leon said the figure was lower than this year’s offshore commercial borrowing program, as external debt would have a smaller portion of the debt program by next year.

The national government is programmed to borrow P1.4 trillion in 2020, 17.6 percent higher than the P1.19 trillion borrowing program for the current year.

For this year, the borrowing mix is set at 73:27, in favor of domestic borrowings. This will be adjusted next year to 75:25, with P1.047 trillion sourced locally and P353.2 billion from foreign lenders.

While providing no breakdown for the commercial borrowing program, De Leon said the Treasury will tap its usual markets, including the US, Japan, Europe and China.

On the other hand, De Leon said program loans, project loans and ODAs are programmed to reach $3 billion for next year.

Meanwhile, the auction committee of the Treasury yesterday decided to reject all tenders for the 91-day securities, while fully awarding bids for the 182-day and 364-day debt papers.

Had the BTr decided to fully award the three-month debt notes, they would have fetched an average rate of 3.122 percent, 12.7 basis points higher than the 2.995 percent recorded in the previous auction two weeks ago.

This was likewise higher than the secondary market rates for the same tenor, which settled at 3.112 percent before the auction closed.

Total tenders reached P21.65 billion, almost three times larger than the P8 billion offer size.

On the other hand, 182-day Treasury bills secured an average rate of 3.174 percent, 0.3 basis points up from 3.171 percent two weeks ago.

Healthy demand met the P6 billion offering, with tenders amounting to P16.41 billion.

Lastly, the average rate for the 364-day T-bills inched down by 0.1 basis point at 3.576 percent as compared to 3.577 percent in the previous auction.

Bids amounted to P21.721 billion, more than 3.5 times higher than the P6 billion offer volume.