Fiscal, monetary authorities disagree on continuation of borrowing plan

Government’s fiscal and monetary authorities are in disagreement on the country’s borrowing plan. The national government has a remaining external borrowing program of $750 million for 2012. but it remains undecided on whether or not it would veer away from the borrowing program  and instead raise the equivalent amount from the cash-rich domestic market.

 

Monetary authorities want the national government to just tap the local debt market for its remaining borrowing needs to siphon off excess liquidity in the system.

 

National Treasurer Roberto Tan told reporters in an interview that there is room to increase domestic borrowings this year given the high level of liquidity in the local market.

 

This was seconded by Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. who, in a Monday budget hearing at the Senate, said the government has room to borrow more from the cash-rich domestic market.

 

However, fiscal authorities prefer to stick to the program to keep the Philippines in the radar screen of foreign lenders.

 

Finance Secretary Cesar Purisima has said that the government is ready to borrow from foreign creditors again this year when there is an opportunity.

 

The government had programmed to borrow $4.02 billion from external sources this year, lower than the programmed $4.5 billion for last year, according to the 2012 borrowing program.

 

Of the $4.02 billion, the government plans to borrow $2.25 billion from the commercial debt market and to borrow $1.77 billion worth of program and project loans.

 

The government borrows from the local and foreign debt markets to fund its budget requirements. — DVM, GMA News