Gov’t sets P630-B local borrowing plan for Q3

The Marcos administration is looking to raise P630 billion from fresh local borrowings in the third quarter to plug its budget deficit as economic managers commit to invest further in infrastructure projects.

The Bureau of the Treasury (BTr) said on Thursday that it would sell Treasury bills (T-bills) amounting to P260 billion and Treasury bonds (T-bonds) amounting to P370 billion in the third quarter.

READ: Gov’t borrowings down sharply in April by 31.3%

The sum of P630 billion marks a P45-billion or 7.7-percent increase from the P585-billion domestic borrowings in the second quarter of this year.

“This is part of our borrowing plan for the year, taking into account market demand for both bills and bonds and following our consultation with our market makers,” National Treasurer Sharon Almanza said in a Viber message.

DBCC keeps growth target

“Higher national government borrowing for the third quarter was understandable after the seasonal increase in tax collections in April, a consistent pattern for many years, as well as wider budget deficits recently,” Michael Ricafort, chief economist at Rizal Commercial Banking Corp. said in a Viber message.

In the first five months of the year, the government’s budget deficit widened to P404.8 billion from the P326.3 billion deficit last year mainly due to higher public spending.

The interagency Development Budget Coordination Committee (DBCC) on Thursday maintained its economic growth target of 6 to 7 percent for 2024 as it expects robust growth momentum to continue over the medium term.

In the first quarter, the country grew by 5.7 percent, outdoing most of its peers in Southeast Asia despite slowing household consumption and public spending.

READ: Marcos admin to borrow P585B from local creditors in Q2

Economic managers also kept the government’s fiscal deficit cap at P1.4 trillion or 5.6 percent of gross domestic product (GDP). However, the fiscal deficit forecast for 2025 was revised upward to 5.3 percent of GDP or P1.5 trillion, a notch higher than the 5.2-percent ratio in the previous meeting as the government wanted to continually invest on infrastructure projects and social sectors.

For Robert Dan Roces, chief economist at Security Bank, the higher borrowing program would enable the government to support further its infrastructure projects following the approval of priority projects by the National Economic Development Authority.

“This increased borrowing supports public investments and addresses revenue shortfalls. It should also bolster foreign exchange reserves and strategically manage finances by taking advantage of current market conditions,” Roces said in a Viber message.