THE borrowing program for the third quarter this year will likely be lower than P300 billion, in line with the slow disbursements made by the government during the first few months of 2019, the Bureau of the Treasury (BTr) said on Monday.
The borrowing program for the second quarter was at P315 billion.
“In terms of the volume, most likely the volume would be lower than the second quarter [borrowing program] since spending was a bit weaker during the first two quarters. But at the same time, we’ve been able to maintain our borrowing program given the auction performance and also in terms of the external [borrowings]. And also the [revenue] collections are pretty good, so we have more than enough cash to be able to finance the sustained higher spending for the next quarter or so,” National Treasurer Rosalia V. de Leon said.
State spending was earlier reported to be sluggish, as the government operated under a 2018 reenacted budget, as well as a spending ban being implemented in line with the May 2019 midterm elections.
“Most likely [below P300 billion], lower than what we have issued,” de Leon added.
She explained that a cash programming meeting will be held sometime this week to assess how fast disbursements are being made by government agencies for implementing projects, which will aid the BTr in calibrating the final volume for the local borrowings for the third quarter.
“[The volume will depend] on the spending. We have a cash programming meeting this week…. We will have to calibrate, because there’s a catch-up plan in terms of the disbursements, so that would be running now.
It would have to start end of May to June. And there’s a commitment from the agencies that they would really be pushing hard in terms of the spending. So we will have to see how spending goes this month,” she said.
For 2019, the national government has programmed its gross borrowings for both domestic and foreign IOUs at P1.19 trillion, higher by 20.7 percent from the 2018 level of P986 billion.
Broken down, external borrowings will account for P297.2 billion and domestic borrowings at P891.7 billion of the total. The government said it is eyeing a borrowing mix of 75:25 for this year, with domestic borrowings accounting for 75 percent and foreign borrowings at 25 percent.
The BTr reported in March that government borrowings for the second quarter of this year was programmed at P315 billion for domestic securities, lower than the first quarter programmed borrowing of P360 billion.
The government has programmed a borrowing of P315 billion for the second quarter of this year in the form of Treasury bills (T-bills) and Treasury bonds (T-bonds).
This is lower by 12.5 percent from the first-quarter programmed borrowing level of P360 billion, and lower by 3 percent than the second-quarter 2018 borrowing level of P325 billion.