The national government is planning to sell five- and 10-year peso-denominated bonds overseas within the second-semester of the year, the Department of Finance (DoF) said Tuesday.

Finance Secretary Cesar V. Purisima, said proceeds from the government's first ever international peso debt papers sale will be used to finance the programmed record budget shortfall of P325 billion this year.

“We will be opportunistic, as well, when examining other financing opportunities. We plan to look at issuing peso-denominated bonds in the international markets,” Purisima said.

Aside from the peso bonds, he also said the government may borrow in behalf of other agencies like Power Sector Assets and Liabilities Management Corporation to cut borrowing costs.

“We will examine debt swaps and exchanges where feasible to reduce the debt stock and debt service payments as well as avoid bunching up of maturities,” Purisima said.

The Development Budget Coordination Committee (DBCC) earlier recommended to raise the country's borrowings this year by 8 percent to finance a record budget deficit.

The government may increase by P57.8 billion the original borrowing program of P708.6 billion for this year from the domestic and foreign debt markets to P766.4 billion.

Under the new borrowing plan, the government is looking at increasing the overseas debt issuance by 15 percent to P254.8 billion from the previous program of P220.5 billion.

Along with the offshore borrowing, the government may also boost its domestic debt issuance by 5 percent from P511.6 billion from P488.1 billion.

The government is also planning to sell retail treasury bonds (RTBs) in August or September this year.

RTBs are IOUs meant to be sold to small investors.

The national treasury said the government is already seeking proposals from banks for the planned issuance of RTBs that will cater to small investors because they can buy the investment instrument for as little as P5,000.

Deputy Treasurer Eduardo S. Mendiola, said the government will probably sell P20 billion to P30 billion of retail bonds this quarter and may raise the size of the offering, depending on the demand.

Proceeds from the retain bonds sale will be used to refinance the government's debt maturities of same instruments.