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The government plans to replicate the tight spreads of dollar and renminbi bonds issued early in the year with the next sale of samurai bonds at the end of the year 2018, Wednesday announced the Secretary of Finance Carlos Dominguez III
. Dominguez said in a statement that foreign investors have demonstrated their high level of confidence in the Philippine economy under the Duterte administration with the tight spreads of previous bond floats.
Tight spreads offer low rates, indicating that the issuer has fewer chances In addition, high interest rates are offered to attract buyers of such riskier investments.
Dominguez said another factor that contributed to the narrow spreads of bonds issued by the Philippines in the offshore market was the fact that the government was now selling securities to increase "We are funding our program" Build, Build, Build, "said Mr. Dominguez, referring to the government's ambitious infrastructure modernization program, consisting of 75 high-impact projects." This is for investment and not for covering our deficit budget because we spend too much. It is actually the investment money we invest. "
Dominguez said in 2016, when the Aquino administration sold bonds, the gap on the US Treasuries was 103 basis points.When the Duterte administration announced that it would be a good thing. it pushed a tax reform program in 2017, the gap dropped by 67 basis points.
After enactment of the Tax Reform Act for Acceleration and Inclusion ( TRAIN) in December, the government The following month, 10-year bonds of $ 2 billion recorded a gap of only 37.8 basis points on US Treasuries, while the initial float of 1.46 billion in March had an even tighter spread.According to the chief financial officer, Dominguez said that the country's revenue agencies – the Internal Revenue and Customs Offices – had exceeded their collection targets following the setting up of TRAIN and having put in place complementary reforms.
National government revenues in the first five months of 2018 increased 19% year-over-year. Tax revenues also increased by 19 percent, with BIR collections increasing by 16 percent and BoC collections increasing by 31 percent over the same period last year.
The fiscal effort went from 13.4 percent of gross domestic product to 14.3 percent. Dominguez said:
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