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Gov’t sets P360-B borrowing program for Q1

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By Melissa Luz T. Lopez, Senior Reporter

THE government is looking to borrow P360 billion during the first three months of 2019 through a mix of short and long-term papers, a third bigger than the amount programmed the previous quarter.

The Bureau of Treasury released its borrowing program for the first quarter, which is higher than the P270 billion it looked to raise from October to December 2018.

Broken down, the state wants to shore up P240 billion from Treasury bills (T-bills) next quarter, higher than the P180 billion previously. The government is also eyeing P120 billion from the sale of Treasury bonds (T-bonds) coming from P90 billion in the fourth quarter of 2018.

The national government borrows from local and foreign sources to fund the increased spending and boost economic activity.

T-bill auctions will be held every Monday at P20 billion each week. This will be split into P6 billion each for the 91 and 182-day tenors, plus P8 billion for the 364-day notes.

In the previous quarter, the Treasury offered P15 billion worth of T-bills weekly, divided into P4 billion for the three-month debt papers, P5 billion for the six-month instruments, and P6 billion for the one-year IOUs.

On the other hand, the government will float a mix of T-bonds from January to March worth P20 billion every other week. The Treasury will offer 10 and 20-year papers on Jan. 10 and 24, followed by seven and three-year notes on Feb. 14 and 28, and five and 10-year instruments on March 14 and 28.

The state plans to borrow P1.189 trillion in 2019 to fund its spending plan. Of the amount, 75% will be sourced domestically while the remainder will be from foreign creditors.

Apart from T-bills and T-bonds, the government may also choose to float other debt instruments in other currencies like the dollar, yen and renminbi to offshore investors. Specific-use bonds are also being eyed to support the rehabilitation of Marawi City.

However, the 2019 national budget is yet to be passed by Congress and signed into law, leaving the fiscal program hanging so far. Economic managers of President Rodrigo R. Duterte said they will reassess their assumptions and estimates by late January, according to Budget Secretary Benjamin E. Diokno.

The budget deficit is projected to widen to as much as 3.2% of gross domestic product in 2019, versus a programmed three percent share this year to accommodate increased government spending particularly on infrastructure.