MANILA, Philippines - The government has so far reduced the share of its foreign borrowings to 16 percent as of end-September and increased the share of domestic funding to 84 percent, according to the Department of Finance (DOF).
The move is part of the Aquino administration’s efforts to focus more on domestic sources to help cushion the economy from foreign exchange fluctuation and to help ease pressure on the peso.
In 2011, the government borrowed 65 percent from the local market and 35 percent from foreign sources, an improvement from 2010’s borrowing mix of 66 percent and 34 percent, in favor of domestic sources.
Actual gross borrowings reached P601.4 billion as of end-September, higher than the P384.8 billion borrowed in the same period last year.
Of the total gross borrowings during the period, the government get the bulk of its financing requirements from the domestic market amounting to P503.61 billion and P97 billion from foreign creditors.
Local borrowings comprised mostly of fixed rate treasury bonds with P364.03 billion.
In 2013, the government has planned to source 75 percent of its funding needs from domestic sources and 25 percent from foreign lenders.
It has programmed to borrow a total of P757.8 billion, of which P189.8 billion or 25 percent will come from foreign creditors and the balance of P568 billion or 75 percent will come from domestic sources.
Finance Undersecretary Jeremias Paul said the increase in domestic funding is in line with the government’s strategy to reduce foreign exchange risks, lengthen maturities and lower interests costs to general fiscal space.
This, in turn, he said would be used to invest in people and create more jobs.
The government has programmed a budget deficit of P279 billion for this year and P241 billion in 2013.