THE GOVERNMENT is confident that it can achieve its target financing mix of 80% domestic debt by next year, Finance Secretary Carlos G. Dominguez III said.
“The economy is very liquid and we can meet our 80-20 target probably by next year,” Mr. Dominguez told reporters last week.
The multi-agency Development Budget Coordinating Committee (DBCC) set the 80-20% borrowing mix in favor of domestic sources at the start of the administration’s term. The ratio is thought to reduce the government’s exposure to currency volatility.
As of October, gross borrowing was P661.76 billion, with 24.5%, or P162.15 billion sourced from foreign creditors.
For 2017, the borrowing target is P727.74 billion, with P182.77 billion and P544.97 billion from domestic and foreign sources, respectively.
In 2018, the government has set a gross borrowing target of P888.23 billion, up 22.05%, with P176.27 expected from external sources.
The government borrows from both local and external sources in order to pay down maturing debt and finance its budget deficit, equivalent to 3% of gross domestic product.
Mr. Dominguez said the government may miss its deficit target this year.
As of October, the deficit stood at P234.9 billion, up 9% from a year earlier, but only 48.72% of the expected P482.1 billion budget deficit this year.
Still, noting the heightened government spending levels, Mr. Dominguez said: “It’s moving in the right direction.” — Elijah Joseph C. Tubayan