Gov’t cuts proposed borrowings in 2015
The national government deliberately reduced the amount of financing it will require for next year as the situation in central Philippines, the region that was badly damaged by super-typhoon “Yolanda” in 2013, has started to normalize.
National Treasurer Rosalia B. de Leon said the government decided to cut its borrowing ceiling from P715 billion as spending for the reconstruction and rehabilitation starting next year is expected to be significant less than in 2014.
“We raised the borrowing program for this year because of Yolanda. Now that we expect that a big part of the recovery program will be completed this year, we decided to reduce our financing requirement for next year by P15 billion,” De Leon said.
Data from the Bureau of Treasury showed that the government is planning to borrow P700.8 billion from local from foreign lenders next year, lower by 2 percent compared with P715-billion program for this year.
Under the 2015 plan, the government will borrow 86 percent of its financing requirement from the local market, while the remainder 14 percent will be sourced from overseas through program and project loans as well as sale of debt papers.
For this year, the government’s borrowing mix is set at 85:15 in favor of local creditors.
While the share of the domestic market is slightly higher next year, the government’s nominal borrowing ceiling for local creditors is lower by 2.4 percent to P605.1 billion from P620 billion this year.
The government has been tapping the domestic market through the sale of short-dated Treasury bills and longer-tenor Treasury bonds.
Meanwhile, the government’s foreign borrowings was almost unchanged at P95 billion in 2015 from P95.7 billion ceiling this year.
Of the total offshore financing, the government is planning to sell P32.6 billion worth of costly commercial notes, P54.4 billion in program loans and project loans worth P8.7 billion.
The government bridges its budget deficit through onshore and offshore borrowings. The latter includes cheap loans from bilateral and multilateral lending agencies.
For 2015, the Aquino administration is looking at a P2.606 trillion national budget, which is higher by about 18 percent compared with P2.26 trillion for this year.
Data from Bureau of Treasury earlier showed that of the total financing program for this year, the government has already borrowed P115.87 billion, lower by 34 percent compared with P176.3 billion in the same period last year.
Foreign borrowings at end-April reached P55.28 billion, way higher than the P6.12 billion a year ago. The government has smaller financing from the overseas markets in 2013 after it decided to abandon its planned sale of debt papers.