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MANILA: The Philippines is looking to issue sovereign bonds in the first quarter of the year to help finance this year’s budget, its finance minister said on Monday, signaling the government is stepping up efforts to upgrade the nation’s infrastructure.
Finance Secretary Carlos Dominguez told a news conference the bond offering could happen between January and February, but he didn’t provide any information on the amount the government planned to raise.
The government’s borrowing plan this year also includes a Samurai bond issue, which Dominguez said may take place toward the latter part of 2018.
National Treasurer Rosalia de Leon said in September the government was looking to raise $1 billion (SR3.75 billion) from the sale of sovereign global bonds to help fund the increase in this year’s spending plan.
Philippine President Rodrigo Duterte signed into law the 3.8 trillion pesos (SR285.69 billion) spending plan for 2018 in December. This year’s budget target tops the previous year’s spending by more than 12 percent as the government forges ahead with plans to expand and modernize its infrastructure.
Dominguez said the government would submit to Congress this month the second of the five tax reform packages, which the president needs to fulfill his promise to build much-needed infrastructure to attract investments and lift economic growth.
Duterte has promised to usher in a “golden age of infrastructure” by raising annual spending on it to 7 percent of gross domestic product from less than 3 percent before he came to power more than 18 months ago.
The first of five tax reform packages, aimed at boosting state coffers and making the tax system simpler and fairer, was signed into law in December.
The new law covers an array of tax changes, including expanding the value added tax base, lowering personal income taxes and raising those on petroleum products and automobiles. It is expected to raise 92 billion pesos in its first year of implementation.
Dominguez said he expects the inflationary impact of the tax reform measure to be minimal at 0.7 percent. The government has a 2-4 percent inflation target this year.