The Marcos administration is planning to borrow P585 billion from local creditors in the second quarter to bridge its budget deficit. The government aims to raise P195 billion through the sale of Treasury bills and P390 billion via Treasury bonds.

The Bureau of the Treasury has scheduled five T-bills auctions in April to raise P75 billion. In May and June, the government plans to borrow an additional P60 billion each month through T-bills sales. Additionally, there will be four T-bond offerings in April to sell P120 billion worth of long-dated debt securities. In May, the government targets to raise P150 billion from the sale of Treasury bonds, followed by four more T-bond issuances in June to raise P120 billion.

Concerns about interest rates were raised by Michael Ricafort, chief economist at Rizal Commercial Banking Corp., who mentioned that the decision to keep the borrowing program size unchanged from the first quarter may be due to a high interest rate environment. The Marcos administration is planning to borrow a total of P1.85 trillion onshore in 2024 to help cover a projected budget deficit of P1.39 trillion this year, equivalent to 5.1 percent of GDP.

Finance Secretary Ralph Recto stated that the government will continue to adopt a 75:25 borrowing mix in favor of domestic sources to manage its debt prudently. Ricafort also suggested that the record Retail Treasury Bond issuance in February and a possible global bond sale later in the year might reduce the need for more local borrowings.

Fabio

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