The Bangko Sentral ng Pilipinas (BSP) has green-lighted the national government to raise up to 500 billion pesos worth of debt from the domestic market to take advantage of low interest rates and the strong liquidity in the financial system. It pointed out that it would be practical for the government and the corporate sector to tap the domestic market that is awash with liquidity, including the funds parked at the BSP in the form of special deposit accounts (SDA) amounting to about 1.46 trillion pesos. Manageable inflation allowed the Monetary Board to slash interest rates by 25 basis points to boost the domestic output of the country. The bank sees inflation averaging 3.1 percent this year, from 4.4 percent last year. It added that the issuance of peso-denominated securities will regulate the inflow of US dollars into the country and stabilize the movement of the foreign exchange market. The borrowing ratio of the government is currently 73:27 in favor of domestic lenders.
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