Philippines to borrow P114B from local lenders

(Updated 6:37 p.m) For the first quarter of 2011, the Philippine government plans to borrow P114 billion from domestic sources, the Bureau of the Treasury (BTr) said Wednesday. The Aquino administration intends to issue P51 billion in Treasury bills and P63 billion in Treasury bonds, the bureau said in a statement. The plan is in line with the BTr’s strategy to sell longer maturing debt papers to stretch government’s debt maturity profile as part of the fiscal policies adopted by the Aquino administration. The first quarter borrowing program includes five-, seven-, 10-, 20-, and 25-year debt papers. Early this month, government issued P200 billion worth of 2035 and 2020 bonds in a domestic debt swap and sale, the second debt exchange by the administration. As part of a dollar-debt swap program, government issued $2.04 billion of 2021 US-dollar bonds and $950 million worth of re-opened 2034 US- dollar bonds in September. Similar debt swaps will be done in the future, BTr officials said, as part of government’s debt management program. The Aquino administration is looking to finance a budget deficit projected at P325 billion or 3.9 percent of total economic output this year. As of end-November, the government’s budget deficit stood at P269.8 billion. Meanwhile, the weaker US dollar against other major currencies helped push Philippines’ external debt to $59.8 billion as of end-September from $57.3 billion as of end-June, the central bank said. The debt stock also grew $5.1 billion or 9.2 percent from $54.7 billion as of end-September 2009. There were more borrowings than repayments during the period, BSP Gov. Amando Tetangco Jr. said. “Borrowings exceeded repayments by more than $4 billion." With the dollar trading on a weak note against other currencies, the Southeast Asian nation’s foreign debt incurred a higher revaluation of $1.1 billion with foreign exchange adjustments, he said. Net borrowings of $788 million and increased holdings of Philippine debt notes by non-residents totaling $154 million were the more concrete reasons that pushed the country’s foreign debt higher, according to the central bank. Still, the central bank said external debt indicators “remained at prudent levels at the end of the third quarter." External debt refers to all types of borrowings by Philippine residents from nonresidents and approved by the central bank. The country’s foreign debt is lower than its gross international reserves of $60 billion, according to the central bank. — JE/VS, GMANews.TV