PH to borrow from global bond market

THE national government will borrow from the global bond market this year to take advantage still low interest rates, according to Finance Secretary Carlos Dominguez 3rd.

“Yes, we will tap the US bond market before rates skyrocket,” he said during a television interview on Tuesday.

The national government has set a P3.035-trillion gross borrowing program this year, based on the Department of Budget and Management’s Budget of Expenditures and Sources of Financing for fiscal year 2021. This compares to the P2.74-trillion gross financing in 2020.

At the start of the year, national government borrowed more from external and domestic creditors as the actual P710.31-gross financing soared by 185.49 percent from P248.79 billion a year ago.

During the month, local financing of P680.761 billion accelerated by 411.17 percent from P680.761 million in January 2020.

Domestic borrowings were generated through the issuance of P50.76 billion and P90-billion worth of Treasury bills and fixed-rate bonds, respectively.

The government also raised P540 billion from the short-term financing from the Bangko Sentral ng Pilipinas.

Foreign borrowings, meantime, picked up by 74.43 percent to P29.55 billion from P115.62 billion a year earlier.

Total external financing in January was raised through P10.47-billion worth of project loans and P19.08 billion generated via program loans.

The Philippines last entered the US dollar bond market in December last year when it raised $2.75 billion (about P132.13 billion) from a double-tranche offering.

The proceeds were used for general purposes, including budgetary support.

The offer secured investment-grade ratings from S&P Global Ratings, Moody’s Investors Service and Fitch Ratings. S&P assigned a “BBB+” long-term foreign currency rating to the issuance; Moody’s, a senior unsecured rating of “Baa2,” and Fitch, “BBB.”