Gov’t to borrow more from domestic market

MANILA, Philippines -The government is sticking to its strategy of borrowing more from the domestic market rather than overseas to fund its budgetary requirements, according to a top economic manager.

“Domestic borrowings will be much, much more next year.  We will be depending more on local borrowings,” Budget Secretary Florencio “Butch” Abad told reporters yesterday.

Abad, however, failed to provide more details on the planned borrowing schedule.

National Treasurer Rosalia De Leon earlier said the share of domestic borrowing for this year is 85 percent with the remaining 15 percent to be tapped from international markets.

The country relied heavily on domestic borrowings last year to capitalize on the local financial system’s strong liquidity and help ward off pressures on the exchange rate.

Foreign borrowing was limited to loans from development institutions such as the Asian Development Bank, the World Bank, and Japan International Cooperation Agency.

For this year,  the country  has programmed to  borrow P715 billion, of which P620 billion will be sourced locally.

The government regularly holds auctions of securities to help fund the country’s budget and provide investors with fresh investment options.

The country’s budget deficit reached P3.3 billion in the first four months of the year, equivalent to just 1.2 percent of the projected P266 billion deficit for the whole of 2014.