Borrowing program for 2012 stays

MANILA, Philippines - There is room to increase domestic borrowings this year given the high level of liquidity in the local market but fiscal authorities are still sticking to the borrowing program for 2012, National Treasurer Roberto Tan said yesterday.

“There is room but there’s no change in the program for now,” Tan said.

In a budget hearing at the Senate yesterday, Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. said the government has room to borrow more from the cash-rich domestic market.

The government has a remaining external borrowing program of $750 million for 2012 but it remains undecided on whether or not it would veer away from the borrowing program this year and instead raise the equivalent amount from the cash-rich domestic market.

Monetary authorities want the government to just tap the local debt market for its remaining borrowing needs to siphon off excess liquidity in the system.

However, fiscal authorities prefer to stick to the program to keep the Philippines in the radar screen of foreign lenders.

Finance Secretary Cesar Purisima has said that the government is ready to borrow from foreign creditors again this year when there is an opportunity.

The government has a remaining foreign commercial funding requirement of $750 million for the year out of $2.25 billion that was programmed.

In January, the Philippines successfully raised $1.5 billion from an issue of 2037 global bonds.

The Philippines, Asia’s largest sovereign issuer, has not issued global peso bonds yet for the year.

The government had programmed to borrow $4.02 billion from external sources this year, lower than the programmed $4.5 billion for last year, according to the 2012 borrowing program.

Of the $4.02 billion, the government plans to borrow $2.25 billion from the commercial debt market and to borrow $1.77 billion worth of program and project loans.

The government borrows from the local and foreign debt markets to fund its budget requirements.

It expects this year’s budget deficit to reach roughly P279 billion or 2.6 percent of the economy’s output, from the P197.8 billion incurred last year or two percent of gross domestic product (GDP).