The Market Monitor Minding the Nation's Business
Two finance officials, speaking at different venues, expressed hope this week that the current political and social turmoil over corruption scandals in the Department of Public Works and Highways (DPWH) do not affect the nation’s economic performance.
Finance Secretary Frederick Go plans to meet with his counterparts in the various departments such as tourism, agriculture, transportation, energy and public works and highways to push for programs and projects that might be categorized as low-hanging fruits.
These are government projects that were delayed because of the ongoing political and confidence problems, and those nearing completion.
Go hopes to scale up government spending and prime economic activities through this tact.
As this developed, National Treasurer Sharon P. Almanza told reporters that buyers have remained upbeat onnPhilippine government securities (GS).
“The GS market is actually rallying while the stock market is down. The GS market is very robust. Even our spread is still very tight,” Almanza said on Nov. 26.
Economists pointed out that public and household spending eased due to weakening confidence, with gross domestic product growth slowing to an over four-year low of 4% in the third quarter. This brought the nine-month average to 5%, putting the government’s 5.5-6.5% full-year target further out of reach.
Still, Secretary Go is happy that government expenditures account for nearly 17% of GDP, higher than the average in Southeast Asia.
Unlike in Japan, however, there are no plans to dramatically increase spending through a stimulus program.
The Department of Finance under Go is expected to prioritize fiscal discipline and reaffirm the government’s target to bring the budget deficit to 5.5% of gross domestic product this year and 5.3% in 2026.
Almanza explained that “the spread of our domestic curve vis-à-vis US treasuries and even our RoP (Republic of the Philippines) is still very tight. Our credit default swap is still at its tightest.”
As of November 24, the government has raised P2.08 trillion from domestic sources as of Nov. 24, close to the full-year program of P2.11 trillion, the Department of Finance said.
The weekly Treasury bills and bonds auctions have been mostly oversubscribed, leading to a steady decline in yields, and its commercial issuances have also seen strong demand.
Based on the 2026 Budget of Expenditures and Sources of Financing, the government plans to borrow P2.6 trillion this year, with bulk to be raised from domestic sources to minimize foreign exchange risks. This will rise to P2.68 trillion next year.
As regards bonds, the benchmark info is as follows:
3 year, maturing on April 22, 2028, 3.625%; 5Y, maturing on July 27, 2030, 6.375% and 10Y, maturing on April 28, 2035, 6.375 percent.