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THE
GOVERNMENT may have had enough of accredited government
securities dealers that, for the past five months, have
displayed a stingy attitude when it comes to their
money.
On
Tuesday Bangko Sentral ng Pilipinas (BSP) Governor
Amando Tetangco Jr. dropped hints that his colleague on
the other side of the BSP complex, Finance Secretary
Margarito Teves, may have plans to obtain financing
abroad as peso funds have become increasingly hard to
get.
“I know
they’re looking at it,” Tetangco said of Teves and his
chief fundraiser Roberto Tan, who heads the Bureau of
Treasury.
Tan has
been forced to reject—since practically the start of the
year—expensive bids for Treasury bills as risk-averse
lenders demand the kind of premium Tan believes are
unacceptable.
In
ceremonies Tuesday in which Citibank cited the
performance of several microentrepreneurs for 2008,
Tetangco was asked if the government’s borrowing program
for the year needs some tweaking.
“Conditions change. They have to consider the cost of
borrowing, and compare and weight between local and
foreign interest rates,” he said.
This has
reference to Teves’s borrowing program this year
requiring the generation of no more than $500 million
from foreign creditors to help balance the nation’s
P1.2-trillion budget.
This was
sharply down from the original borrowing plan totaling
$1 billion and a borrowing mix of 70 percent in pesos
and 30 percent in foreign currency.
Observers said it makes sense for the government to
increase its foreign borrowing activities given the
present strength of the peso and relatively low interest
rates abroad, particularly in the US where the onset of
a recession has triggered a series of rate cuts.
It also
makes sense to take a second look at the overseas credit
market given the state of Manila’s external sector and
its present gross international reserves of some $37
billion and remittance flows that may hit $15.7 billion
this year.
Treasury
chief Tan was reported to have said it was too early at
this point to recast the country’s borrowing mix.
Tetangco
said Tuesday the borrowing mix was not cast in stone and
could be changed at a moment’s notice to suit the fiscal
program.
In any
case, it is one of Tetangco’s tasks to pass judgment on
any of government’s proposed foreign borrowings because
of their impact on monetary management. |
