The government plans to borrow P585 billion from the local debt market in the first quarter in the hope of favorable yields, as the Bangko Sentral ng Pilipinas (BSP) kept key policy rates steady in November and December.

In a memorandum to all government securities eligible dealers yesterday, the Bureau of the Treasury said it is targeting to raise P175 billion via the auction of 91, 182 and 364-day treasury bills (T-bills) from January to March next year.

The government aims to raise another P390 billion via the sale of Treasury bonds (T-bonds) with maturities of three to 20 years in the first quarter of 2024.

The Treasury holds the auction of short-term T-bills every Mondays and long-term T-bonds every Tuesdays.

Next year, the Philippines will increase its borrowing program by more than 10 percent to P2.46 trillion, still in favor of domestic creditors.

The national government borrows heavily from domestic and foreign creditors to finance the country's wide budget deficit as it continues to spend more than what it earns.

Sourcing from the domestic market is part of the administration's prudent debt management strategy and its initiatives to further develop the domestic capital market.

Latest data showed the national government's total outstanding debt went up by 6.2 percent to a record high of P14.48 trillion in end-October from P13.64 billion in end-October last year.

During the 10-month period, the bulk or 68.4 percent of the debt portfolio came from domestic sources as the net issuance of government securities climbed by 5.8 percent to P9.9 trillion from P9.36 trillion.

Foreign borrowings that account for 31.6 percent of the total borrowings went up by 6.8 percent to P4.58 trillion from P4.29 trillion.

For the 10-month period, borrowings slightly went down by 1.5 percent to P1.98 trillion from the P2.01 trillion sourced from January to October 2022.

As of end-October, domestic borrowings decreased by a percentage to P1.52 trillion while offshore financing slipped by 12 percent to P456.31 billion.

This means that the government already used up 89 percent of the borrowing plan it crafted for 2023, which is at P2.21 trillion.

This year government's borrowing plan consists of P1.654 trillion from domestic sources and P553.5 billion from foreign sources.

Next year, the Philippines aims to increase its borrowing program by more than 10 percent to P2.46 trillion, still in favor of domestic creditors.

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