ORETA: FINANCE CHIEF'S PLAN TO HIKE DOMESTIC BORROWINGS PREMATURE
Manila, July 26, 2003 Opposition Senator Teresa Aquino-Oreta is questioning Thursday the reported plan by Finance Secretary Jose Isidro Camacho to increase domestic borrowings in 2004 to fund the national budget.
Oreta likewise cited the reports that the Bureau of Internal (BIR) would increase its tax collection target by six billion pesos to 430 billion pesos this year and Malacaņang itself declaring that the "budget deficit monster" has already been tamed following the US$658 million windfall that the Supreme Court forfeited recently to the government.
Because of this, she asked why Camacho appears to be bent on sourcing more borrowings from the domestic market next year.
"Why would Camacho resort to another borrowing spree, this time on the domestic front, when he has been claiming higher revenue collections and a more manageable deficit, with the government even expected to generate savings of 25 billion pesos this year owing to lower rates on debt interest payments?" she asked.
She cited Camacho's plan to squeeze out the private sector from the capital market by shifting to domestic borrowings next year-- despite claims of a manageable deficit for the first semester of 2003-- could have an adverse impact on interest rates and expansion plans in the business sector.
According to reports quoting National Treasurer Sergio Edeza, the government will source almost 80 percent of its financial requirements next year from the domestic market to help keep the 197 billion peso-programmed deficit for 2004 within target.
Reported by: Sol Jose Vanzi
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