The government plans to borrow as much as P85 billion next year to help finance the expenditure requirements of state-owned firms.
The government will undertake the borrowing, but the concerned government-owned and -controlled corporations will pay back the loans.
According to Finance Secretary Cesar Purisima, the Aquino administration is willing to try out a new debt management strategy where the government will borrow on behalf of state firms.
The government is expected to incur less costs when it goes to the capital market to borrow through bond issuances, Purisima said.
The same may not be said for GOCCs, Purisima added.
“When the national government borrows, it is charged an interest rate that is 50 to 75 basis points lower than interest rates charged by the market when the GOCCs are the ones doing the borrowing,” Purisima said Monday during a congressional hearing on the proposed 2012 national budget.
The GOCCs will greatly benefit from reduced borrowing costs when the government itself undertakes the borrowings, he said.
“Whether it is a GOCC or the national government that borrows [money], at the end of the day, the burden still rests with the national government,” Purisima said, explaining that debts of state-owned firms are guaranteed by the government.
According to Finance Undersecretary Rosalia de Leon, the P85 billion to be borrowed on behalf of GOCCs next year would be on top of the P727.4 billion worth of loans that the government itself would require.
De Leon said that the Power Sector Assets and Liabilities Management Corp., the agency in charge of selling the assets and managing the debt of National Power Corp., would account for bulk of the P85 billion to be borrowed by the government.