No foreign borrowings for now – Purisima

MANILA, Philippines – The Aquino administration is in no hurry to tap the overseas debt market to raise this year’s remaining foreign borrowing program of $750 million.

Finance Secretary Cesar Purisima said the government has enough fiscal space to wait for better market conditions.

“We have fiscal space. We are in control of our fiscal destiny,” he said on the sidelines of the 9th Annual Meeting of the Asia-Pacific Economic Cooperation financial institutions on Friday, July 20.

The government uses borrowings to finance its budget deficit, which, in the first 5 months, stood at only P22.8 billion.

The central bank wants the government to tap the domestic market for the rest of its borrowing needs to siphon off excess liquidity. 

While the government prefers domestic borrowings, Purisima said the Philippines must maintain its presence in the overseas market so its bonds would actively trade abroad.

The government has a remaining foreign commercial funding requirement of $750 million out of the $2.25 billion that was programmed for 2012.

The last time it went to the foreign debt market was in January, when it successfully raised $1.5 billion through the issuance of 2037 global bonds.

Purisima said the government will resume its foreign borrowings “if there’s an opportunity.” – Rappler.com