Business World
THE GOVERNMENT, which relies on debt to plug a deficit and support its vital programs, will borrow P114 billion from the domestic market in the first quarter of 2011.
Yesterday’s announcement came as a source said the Bangko Sentral ng Pilipinas (BSP) had also given its approval in principle for the issuance of global peso bonds worth up to $1.5 billion early next month.
The Bureau of the Treasury, in a statement, said a total of P51 billion would be borrowed through the sale of Treasury bonds while P63 billion would be sourced via Treasury bills.
The borrowings would be 52% higher than programmed debt sales for the last three months of 2010.
The government set a domestic borrowing program of P75 billion in the fourth quarter but actual issuances only amounted to P65.78 billion, according to Treasury data.
"The borrowings for the first quarter will mainly refinance the upcoming domestic maturities and partially the foreign maturities," National Treasurer Roberto B. Tan told BusinessWorld.
"The borrowings will also be used to finance the government’s expenditures for the first quarter," he added.
Budget Secretary Florencio B. Abad has said the Aquino administration would be front-loading expenditures in the first half of next year.
Regarding the global peso bond offering, Mr. Tan said:"the approval of the central bank does not mean that the government will issue the $1.5 billion bonds in January."
"We are still studying the government’s foreign borrowing for next year; as of the moment there is no decision yet. The approval of the BSP is just a go-signal for now. We will announce as soon as we have finalized," Mr. Tan added.
The source said the bonds would have tenors of 15 to 25 years.
In September, the Philippines sold $1 billion of global peso bonds in Asia’s first global local-currency debt issue. -- with Reuters
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