ASEAN KEY DESTINATIONS
Philippines stops borrowing
Finance Secretary Cesar Purisima on Friday told reporters that the government need not use up its authority to borrow the remaining US$500 million of its foreign commercial borrowing program for the year.
“If there is a high level of liquidity, should there still be need to pursue more borrowing?” Purisima said on the sidelines of the Mid-Year Economic Briefing at the Philippine International Convention Center.
The Aquino administration had set a $2.5 billion foreign commercial borrowing program for 2011.
It already sold global peso notes in the first quarter of the year.
Purisima said the decision to drop further borrowings was also a result of the government’s lower fiscal deficit. In the first eight months of the year, the fiscal gap was less than half the P300 billion full-year program.
At end-August, the government incurred a budget shortfall of only P34.49 billion, a wide rift from the P234.35 billion programmed for the first three quarters. “However, we might still do it provided there’s opportunity for liability management,” Purisima said, referring to additional foreign commercial borrowing.
He said the Aquino administration remains committed to its liability management program by issuing more local-currency debt aimed at reducing risks related to currency fluctuations, lowering interest costs and stretching the debt profile to reduce bunching up of maturities.
“We’re considering all instruments but have yet to finalize our borrowing options for next year,” the finance chief said. The Philippines intends to borrow P727.4 billion from the domestic and offshore markets in 2012 to plug next year’s budget deficit of P260 billion, or 2.6 percent of the country’s gross domestic product.
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