Gov’t keeping programmed 2018 borrowing mix

Despite the delay in the planned issuance of panda bonds, the government is intent to keep the 80:20 borrowing mix in favor of domestic sources next year, Finance Secretary Carlos G. Dominguez III said.

“The economy is very liquid, and we can meet our 80:20 target next year,” Dominguez told reporters recently.

Last week, Dominguez said that since the Bureau of the Treasury was still awaiting final approval from the People’s Bank of China, the panda bonds issuance would be moved to the first quarter of next year.

Dominguez earlier said they had planned to issue before the end of the year $200 million worth of three- to five-year panda bonds, or yuan-denominated debt paper issued in China by foreign governments or firms.

“Similar to other fund-raising activities, a panda bond offering is subject to favorable market conditions in the onshore renminbi market and provides competitive pricing compared to other funding options,” Dominguez said.

Also, Dominguez said the government was “on track for its usual start-of-the-year US dollar bond sale.”

Dominguez, however, said they had yet to determine the amount of dollar bonds to be offered.

Treasury documents showed that the Philippines plans to issue $1 billion in bonds offshore early next year, a smaller volume than the previous offerings, as the government relies more on grants and loans from development partners such as China and Japan.

The global bonds to be sold next year will be half of the $2-billion worth issued yearly from 2015 to 2017.

Of the P888.1-billion gross borrowings programmed by the government for 2018, 80.2 percent or 711.8 billion will be sourced locally or from the sale of treasury bills and bonds, Treasury documents showed.

The remaining 19.8 percent or P176.3 billion will be borrowed from external sources.