THE government intends to locally borrow P250 billion in June, the last month before President Rodrigo Duterte formally steps down from office.
Broken down, the national government plans to borrow P175 billion through auctioning off Treasury Bonds (T-bonds) and another P75 billion through selling Treasury Bills (T-bills).
National Treasurer Rosalia V. De Leon told reporters that the domestic borrowing program was “calibrated based on domestic requirement and past rejections,” referring to the results of the recent government securities auctions.
Of the P200-billion domestic borrowing program that the government set this month, the Bureau of the Treasury sold P141.3 billion in government securities.
In recent auctions, investors have been demanding higher rates on the back of expectations that the Bangko Sentral ng Pilipinas and the US Federal Reserve will be continuing to raise interest rates in a bid to ease inflation’s impact on economic recovery.
Based on the schedule of offerings released by the Treasury last Thursday, a combined P15-billion worth of 91-day, 182-day and 364-day tenors per day will be auctioned off on May 30 and all the four Mondays of June. Meanwhile, P35 billion in T-bonds per auction day will be offered on May 31 (Tuesday) and all succeeding Tuesdays.
For this year, the government is expected to borrow a total of P2.2 trillion, around 75 percent of which is expected to come from domestic sources. Reissued 3-year T-bonds will be offered on May 31 while 5-year debt papers will be sold on June 7.
Apart from these, 7-year T-bonds each will be auctioned off on June 14 and June 28 and 10-year notes on June 21. As of end-March, the national government’s outstanding debt has hit a new record-high of P12.68 trillion as it resorted to more borrowings after revenue collections remained weak while government spending grew.
The national government’s debt-to-GDP ratio has also risen to a 17-year-high at 63.5 percent, above the internationally recommended 60-percent threshold by multilateral lenders for emerging markets like the Philippines. It is also the highest since the country’s debt-to-GDP ratio hit 65.7 percent in 2005 under the Arroyo administration.
During a virtual briefing last Wednesday, Socioeconomic Planning Secretary Karl Kendrick T. Chua said the Philippines going the way of Sri Lanka in terms of debt is improbable: “Super malabo.”
“We have a very strong economy that can bring down that debt level. And we also need to manage our fiscal resources and raise revenues,” Chua said. “Raising revenues [will]primarily [be] driven by making the economy grow stronger, then supported by tax policy and administration measures. So that is how over the medium term we will bring down our debt levels.”