Finance Secretary Ralph G. Recto convened a briefing session on the country’s strategic financing program for 2024 at the Bureau of the Treasury (BTr)’s office in the Ayuntamiento Building, Intramuros on January 17, 2024.
To raise the country’s total financing requirement for the year of PHP 2.46 trillion, the government will continue to adopt a 75:25 borrowing mix in favor of domestic sources.
This prudent debt management strategy will allow the country to effectively mitigate foreign exchange risks, take advantage of the abundant liquidity in the country’s financial system, and support the development of the local debt and capital markets.
To raise these funds, the BTr shared that it targets to issue the 30th tranche of its Retail Treasury Bond (RTB) within the first quarter.
The RTBs encourage ordinary Filipinos to start investing in safe and stable sources of passive income, while promoting financial inclusion. To further this agenda, the BTr is looking to engage more digital finance platforms, allowing the BTr to reach a wider investor base.
In its efforts to further develop the country’s local debt and capital markets, the BTr will spearhead several capital market development initiatives such as improving the Government Securities Repo Program and inclusion in an emerging market bond index.
To fulfill its 2024 external financing program, the BTr is looking at various global bond markets, consistent with its objective of diversifying funding sources. The BTr is exploring a potential curtain-raiser offering in the first semester of the year.
During the briefing, BTr officials also presented its key accomplishments in 2023.
Last year, the Bureau was able to raise PHP 1.87 trillion despite the challenging market environment, PHP 1.65 trillion of which was sourced from the issuance of domestic treasury bills and government securities, while another PHP 220 billion from external commercial sources.
The funds raised by the BTr form 85 percent of the gross financing requirement of the National Government.
The funds raised domestically included PHP 283.71 billion through the issuance of the 29th tranche of the Retail Treasury Bond (RTB 29) and USD 1.26 billion (about PHP 70.14 billion) for the second tranche of the Retail Dollar Bond (RDB 2) that attracted investments from Overseas Filipinos from over 32 countries.
Additionally, the Philippines issued its first-ever Tokenized Treasury Bonds (TTBs) in November 2023, paving the way for increased retail investor access and participation in the government securities market.
Meanwhile, the Republic of the Philippines (ROP)’s USD 3 billion (about PHP 166.98 billion) global bond transaction in January 2023 received an overwhelming demand from investors with an oversubscription that peaked over nine times the offer.
In addition, the ROP’s maiden USD 1 billion (about PHP 55.67 billion) Sukuk Bond, whose order book reached a peak oversubscription of 4.90 times, has expanded the country’s financing avenues and further diversified investor base.
To complement its fundraising efforts, the BTr likewise generated an excess income of PHP 63.7 billion, which supported the government’s priority programs.
For a holistic risk management approach, the BTr published in 2023 its National Asset Registry System (NARS) Portfolio Risk Report, which analyzed asset concentration and simulated extreme disaster events to quantify the government’s financial exposure.