The government is considering Samurai, dollar bonds this year

THE GOVERNMENT is watching to issue Japanese yen and U.S. dollar-denominated bonds within a year, the treasury chief said.

“I expect both the dollar and possibly Samurai bonds this year. Both are being considered,” Finance Secretary Ralph G. Recto told reporters on the sidelines of the Economic Journalists Association of the Philippines-San Miguel Corp. economic forum.

The government plans to borrow $5 billion this year, of which $2 billion was raised from the global bond issue last May. That still leaves $3 billion yet to be raised.

“As for the Samurai bonds, the FThe first mandate of the Treasury and the Ministry of Finance is to ensure that when we need to borrow, we borrow at the lowest possible interest rate,” he said during the forum.

“Yes, we are considering Samurai bonds, but we are timing the market and looking at the best time to do this, or if we need to do it at all.”

The Philippines last issued Samurai bonds in April 2022, raising ¥70.1 billion.

Mr Recto said the timing of bond issuance will also depend on the US Federal Reserve’s easing path.

“It depends on the Fed or global markets. Once they start lowering rates, that will be an opportunity to borrow,” he added.

The Fed has previously indicated it could delay the start of the easing cycle until December.

The national government’s outstanding debt rose to a new high of P15.35 trillion at the end of May, with external debt accounting for 32% or P4.9 trillion of the total.

REVENUE COLLECTIONS
Meanwhile, Mr. Recto said US revenue collections rose to P2.13 trillion Ffirst half of the year, 14.5% more than P1.86 trillion collected in the same period last year.

“With 50% of the revenue target already achieved in the first semester, we are on track to achieve the P4.27 trillion revenue program by 2024,” the DoF said in a separate statement.

Preliminary data from the department shows that tax revenues rose 8.8% to P1.81 trillion at the end of June from P1.67 trillion a year ago.

Bureau of Internal Revenue collections rose 10.2% to P1.34 trillion in the six-month period. This was already 44% of the BIR target of P3.05 trillion for this year.

In a separate statement, the Bureau of Customs said collections rose 5.22% to 456.04 billion euros in the January to June period.

It also exceeded its target of P442.62 billion for the six-month period by 3.03%, the agency said.

The DoF said non-tax revenues rose 64.5% to P316.52 billion in the first half.

Although the DoF said it does not plan to implement new taxes this year, there are six measures pending in Congress that are expected to generate $42 billion in annual revenue.

These include Package 4 of the Comprehensive Tax Reform Programme, which includes an excise tax on pick-up trucks, the value added tax on digital service providers, excise taxes on single-use plastics, mining Fiscal regime, the change in motor vehicle road user status and changes to the Business Recovery Act and corporate tax incentives.

Tax collections are expected to increase by an average of 11.8% per year due to digitalization and plugging leaks in the tax system, Mr Recto said.

‘STOP POGO’
Meanwhile, Mr. Recto said he is ready to call for the closure of all Philippine oFFgambling operations ashore to President Ferdinand R. Marcos, Jr.

“If they don’t do anything, and they pay taxes, that’s fine with me. But I think there are a lot of issues surrounding the POGO (Philippine Offshore Gaming Operators) industry,” Mr Recto told reporters.

“That is why I am willing to recommend to the President to end POGOs,” he said in mixed English and Filipino.

The government could lose $20 billion in annual revenue if it decides to ban POGOs, the Philippine Amusement and Gaming Corp. said. earlier. — BMDcruz