Govt to borrow P215B in Aug

THE government intends to borrow P215 billion from domestic sources next month, according to a borrowing program released by the Bureau of the Treasury on Wednesday.

Treasury bills (T-bills) were intended to raise P75 billion, while T-bonds were anticipated to secure P140 billion.

Additionally, T-bills with tenors of 91, 182 and 364 days are all programmed to yield P25 billion each during the month.

T-bonds with tenors of three-and-a-half, seven, 10 and five-and-a-half years are expected to generate P35 billion each.

The national government has set a gross financing ceiling of P2.74 trillion for this fiscal year, according to the Department of Budget and Management’s Budget of Expenditures and Sources of Financing for Fiscal Year 2022.

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The amount of domestic financing was pegged at P1.91 trillion. Fixed-rate T-bonds will bring in P1.86 trillion while T-bills would bring in P52 billion.

In the five months ended in May this year, domestic funding plunged by 57.35 percent to P644.81 billion from P1.51 trillion a year ago. To raise money from domestic sources, retail Treasury bonds worth P457.79 billion and fixed-rate bonds for P446.44 billion were both issued.

This brought actual gross financing for the period of January to May 2022 to P924.42 billion, a decrease of 47.5 percent from P1.76 trillion for the corresponding period in 2021.

In order to lower foreign exchange risks, the national government would borrow more from local creditors, Finance Secretary Benjamin Diokno previously announced.

“The financing mix, if I remember it right, is 75-25. I think for the long term, we will try to increase this to 80-20. We’ll borrow domestically 80 percent and 20 percent from foreign sources. We are doing this in order to reduce our foreign exchange risk,” he explained.

Additionally, Diokno reaffirmed that the national government’s strategy to borrow money from abroad will be opportunistic.

“There are many sources of borrowing in terms of foreign debt. So, we will choose… the best terms like for example, if it is 40 years to pay right and with low interest, we would intend to borrow from those sources,” he noted.