Gov't to borrow P200-B locally in March
The Bureau of the Treasury maintained its domestic borrowing program level for March amid a rising interest rate environment.
Based on the Treasury advisory on Wednesday, Feb. 22, the March financing plan of the Marcos administration is set at P200 billion, unchanged from this month’s program.
The bureau indicated that it will sell P75 billion worth of Treasury bills (T-bills) and P125 billion in Treasury bonds (T-bonds) next month.
The Treasury will still hold a weekly auction for T-bills and T-bonds, offering P5 billion worth of each 91-, 182-day and 364-day long-term IOUs every Monday and issue them on March 1, 8, 15, 22 and 29.
Moreover, the bureau will issue P25 billion worth of six-, 10-, 13-, 20-, and seven-year T-bonds on March 2, 9, 16, 23, and 30, respectively.
Earlier, Finance Secretary Benjamin E. Diokno said the government will continue borrowing mostly from the domestic debt markets under the Marcos administration.
Last Feb. 18, the Marcos administration raised P283.71 billion from the 5.5-year retail treasury bonds (RTB) sale, higher than the government’s P250 billion ceiling.
Of that amount, P162.18 billion was awarded at the rate-setting auction last Feb. 7, while an additional P121.53 billion was raised during the one-week offer period, which include P31.67 billion from a swap offer.
The government’s aggressive domestic borrowings comes as the Department of Finance (DOF) reported that the country recorded a debt-to-gross domestic product (GDP) ratio reached 60.9 percent at end-2022.
The latest debt ratio, however, was lower than the 61.8 percent target set in the Medium-Term Fiscal Framework (MTFF).
Under the MTFF, the government aims to bring down the debt-to-GDP ratio to less than 60 percent by 2025 and further down to 51.1 percent by 2028; reduce the deficit-to-GDP ratio to 3.0 percent by 2028; and maintain high infrastructure spending at 5 to 6 percent of GDP annually.
As of December 2022, the total outstanding debt the national government stood at P13.4 trillion.
Of that amount, domestic debt accounted for P9.2 trillion or 68.6 percent of the total, while external debt made up the remaining P4.2 trillion or 31.4 percent of the total.