Gov’t plans $1-B global bond sale

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THE NATIONAL GOVERNMENT plans to raise $1 billion from a global bond sale to help finance next year’s P3.767-trillion national budget, which now awaits legislative approval, documents from the Bureau of the Treasury showed.

The global bond sale will form part of the programmed P176.27-billion external borrowing next year, which in turn will account for about a fifth of 2018’s P888.06-billion total borrowing program. Domestic creditors will account for 80% of next year’s borrowings at P711.96 billion.

“We’re looking at an 80-20 mix…” National Treasurer Rosalia V. de Leon told reporters yesterday on the sidelines of 2018 budget deliberations at the House of Representatives.

This will be the second global bond sale under President Rodrigo R. Duterte, after the government raised $500 million in new money through a 25-year dollar-denominated bond sale in January.

Pressed for details of the sale, Ms. de Leon told reporters that timing of the sale “depends on market conditions,” adding that the government is securing the necessary approvals.

Treasury documents also showed that foreign program loans for next year will nearly double to P84.21 billion from the P42.47 billion planned this year, while external project loans will grow by a third to P41.05 billion from P30.3 billion.

Next year’s proposed national government budget is 12.4% more than the P3.35 trillion approved for 2017. That spending plan will see infrastructure outlays rise 38% to P1.17 trillion ($23.39 billion), equivalent to 6.68% of gross domestic product (GDP), in 2018 from P847.22 billion ($16.94 billion), equivalent to 5.32% of GDP, this year.

Aggressive spending on infrastructure is a cornerstone of the economic policy of the current government, whose “Build, Build, Build” program will see these expenditures hit P1.899 trillion ($37.975 billion) in 2022, when Mr. Duterte ends his six-year term. His government targets to a total of P8.44 trillion ($168 bilion) in infrastructure spending in those six years. — Elijah Joseph C. Tubayan