Bulk of 2013 govt borrowings to be sourced locally

MANILA, Philippines – The Philippine government plans to borrow P757.75 billion debts in 2013, bulk of which will be sourced from domestic creditors, to finance spending under its proposed P2-trillion national budget.

Of the amount, P567.95 billion will be raised locally, while the rest will be obtained from foreign creditors, government data showed.

The Aquino administration has been borrowing more from the domestic market, through the issuance of Treasury bonds and bills, to take advantage of high liquidity. The move also protects the economy from foreign exchange fluctuations.

Next year’s borrowing program is equivalent to a 75-25 mix, in favor of domestic.

The mix is the same as this year, although Finance Secretary Cesar Purisima said the share of domestic debt may be raised to 80% before the year ends.

The government borrows to finance its budget deficit, or the gap between its revenues and spending.

It set a budget deficit of P280 billion this year as it accelerates spending to stir economic growth. In 2011, the deficit amounted to P197 billion. – Rappler.com