Government trims fund requirement to P169.3B this year

Government has trimmed its financing requirement to P169.3 billion this year from the revised level of P191.5 billion. The P22.2-billion difference resulted from renewed foreign borrowings.

Under the new P169.3-billion financing program, net domestic borrowings are scheduled to increase slightly to P166.3 billion from the revised P165.2 billion. Net foreign financing was trimmed down to P3 billion from a high of P26.3 billion.

Among the foreign borrowings expected to fill up the country’s financing requirements is the $500 million which will come in three tranches.

"The old financing program calls for a cash build-up of about P25 billion, which we realized is too big," Sergio G. Edeza, Bureau of Treasury (BTr) head, said.

Under the old financing program, government must improve its free-cash position to P81 billion from the P56 billion last year.

Edeza said that under the new target, a large free-cash build-up is not necessary. "The national coffers has about P70 billion in free-cash."

The new program states that the mix leans more on domestic source at 98.22 percent compared to 86.26 percent in the old program with the external source down to 1.78 percent from earlier 13.73 percent.

The national treasurer said they could not afford to bring down the government’s free-cash position to even as low as P30 billion since this would result in a tight rein on its domestic borrowings.

"We can opt to keep the P56-billion level or even lower it to P30 billion and still be comfortable."– Ted Torres