By Melissa Luz T. Lopez, Senior Reporter

THE GOVERNMENT plans to borrow over a fifth more in 2018 — with bulk of loans to be sourced locally — to help support its ambitious spending plans, National Treasurer Rosalia V. De Leon told reporters yesterday.

The Philippines will borrow about P889.72 billion next year, 22.3% more than its revised P727.64-billion program for 2017, Ms. De Leon said, explaining: “We are also looking at a higher [ceiling] in terms of… the deficit, so it is a higher amount.”

Ms. De Leon said the government will retain an 80%:20% borrowing mix, still in favor of domestic sources. Broken down, P711.776 billion will be sourced from local creditors, bulk of which is usually raised from the state’s offering of Treasury bills and bonds. About P177.944 billion will be borrowed from external sources, although Ms. De Leon said the Treasury has not yet determined how much will be secured via commercial loans and through foreign aid.

The Duterte administration is looking at a wider deficit ceiling equivalent to three percent of gross domestic product (GDP) annually starting 2017, as it plans to drastically raise spending, particularly on infrastructure.

The 2017 borrowing program was adjusted upward from P631.294 billion previously, in order to reflect the programmed deficit cap.

Last year, the government incurred a P353.422-billion budget gap, equivalent to 2.4% of GDP.

The Philippines in the past six years had embarked on a program of fiscal consolidation — increasing revenues while instilling more discipline in spending — that earned for it a string of investment-grade ratings from global debt watchers starting in 2013.

The administration of President Rodrigo R. Duterte, who assumed office at the end of June last year, now plans to capitalize on the substantial fiscal space built to ramp up spending on infrastructure and social services in order to fuel faster economic growth that, in turn, will lift more Filipinos out of poverty.

The Treasury raised P150.602 billion in the first quarter, and now looks to generate P180 billion between April-June through weekly auctions of debt papers.

The government also raised $500 million in new money as it sold dollar bonds to foreign investors in January, as well as some P175 billion from its public offering of retail Treasury bonds last April.

Ms. De Leon said the 2017 borrowing schedule does not factor in the plan to issue “panda” bonds — denominated in yuan — which Finance Secretary Carlos G. Dominguez III wanted to pursue within the year.

“We still have to see the emerging developments in the ‘panda’ market so we have not really definitely said that we will go to the ‘panda’ market,” Ms. De Leon told reporters. “It will be a maiden issuance so we have to learn the process and learn the market more and make sure that whatever rates we get will also be competitive for the secondaries of our issuances right now.”

Mr. Dominguez has said that he is looking to issue yuan-denominated debt papers sometime next semester, which could amount to $200 million and come in three- and five-year tenors.

This new fund-raising platform will further pad the country’s coffers and support plans to increase infrastructure spending to an equivalent of 7.1% of GDP by 2022. In turn, this infrastructure push is expected to drive overall growth to as fast as 7-8% by the end of Mr. Duterte’s term in mid-2022 from the 6.2% average in the past six years, slash unemployment rate to 3-5% by 2022 from 5.5% last year and cut the national poverty rate to 14% also by then from 21.6% in 2015.