The government plans to raise $1 billion in new money from its upcoming global bonds sale to finance its higher infrastructure spending requirements.
Deputy Treasurer Erwin Sta. Ana said the higher amount of new money being considered for next year’s offshore bond sale, which is more than the usual $500 million, was in line with the 2018 financing plan.
“The financing program for next year is higher than in 2017, so the foreign portion is relatively bigger than previously,” he explained.
Finance Secretary Carlos Dominguez III earlier said the upcoming transaction would still be a combination of bond sale and swap.
Bureau of the Treasury documents had shown that the Philippines planned to issue $1 billion in offshore bonds early next year, a smaller volume than the previous offerings, as the government relied 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, wherein three-fourths had been allotted for a bond swap and the remaining $500 million in new money.
Of the P888.1 billion gross borrowings programmed by the government for 2018, 80.2 percent or P711.8 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.
Sta. Ana said the Treasury was already securing approvals from here and abroad, including the US Securities and Exchange Commission, for the upcoming transaction.
Dominguez said the new money to be raised from the global bond sale would mostly be spent on infrastructure.
“Infrastructure spending is accelerating as announced earlier, [as of October] we are already 11 percent more than last year, so we expect this acceleration to continue next year,” Dominguez said.
Under the ambitious “Build, Build, Build” program, the government would roll out 75 flagship, “game-changing” infrastructure projects, with about half targeted to be finished within President Duterte’s term, alongside plans to spend a total of up to P9 trillion on hard and modern infrastructure until 2022. —BEN O. DE VERA