PH borrowing slower as gov’t still awash with cash, says ADB

As the government remained awash in cash due to underspending at the start of the year, bond issuance in the Philippines declined to $6.7 billion in the third quarter of 2019.

The Asian Development Bank (ADB’s) Asia Bond Monitor for November 2019 showed that government borrowings through T-bills and bonds fell 12.5 percent to $5.3 billion from July to September.

The ADP report said sufficient funds had been raised in previous bond sales.

The Bureau of the Treasury offered P230 billion in T-bills and T-bonds during the third quarter of 2019, lower than the P315-billion domestic borrowing program for the second quarter of the year.

In June, National Treasurer Rosalia V. de Leon said third-quarter domestic borrowings would reflect weaker government spending during the first half of 2019 as it operated through a reenacted 2018 budget following Congress’ failure to approve the budget on time as legislators bickered over funds they could pocket through pork barrel.

Actual sale of T-bills and bonds reached P273.4 billion in the third quarter of 2019, below the second quarter’s P312.4 billion, the ADB said.

Fourth quarter domestic borrowing was even lower at P220 billion, as the government had “sufficient buffers to accommodate strong spending for the rest of the year” while it tried to splurge to make up for underspending early in 2019.

The government underspent P1 billion a day on public goods and services from January to April 2019 before President Duterte finally signed the P3.7-trillion 2019 national budget in mid-April.

The ADB said corporate bond issuance in the Philippines fell by a faster 40.9 percent to $1.4 billion between July and September “due to lower seasonal demand during the quarter.”

According to the ADB, just 56 firms had been actively tapping the local bond market at the end of the first nine months.

Edited by TSB