Systems of Public Debt

Management in the Philippines

Presented by: Earl Jan L. Santos

 How do you effectively
manage and pay off your debt?
What strategies or actions do
you take to ensure timely debt
repayment?
Which non-essential expenses in
your budget are you willing to cut
or eliminate in order to improve
your financial situation and
prioritize debt repayment?
Habits to Effective Debt Management

Create a Prioritize Debt

Track Expenses Pay on Time
Budget Repayment

X
Pay More than Snowball or Negotiate
Avoid Taking
the Minimum Avalanche Interest Rates
on New Debt
Method
Habits to Effective Debt Management

Build an Cut Seek

Increase
Emergency Unnecessary Professional
Income
Fund Expenses Advice
Goal

Avoid Practice
Impulsive Stay Motivated Review and Discipline &
Purchases Adjust Patience
 Systems of Public Debt
Management in the Philippines
Table of contents
01 02
Public Debt Systems of PDM
Management in the Philippines

03 04
Debt Management
Significance of
in Education
Effective PDM
Institution
 01
Public Debt
Management
Definition
Public Debt Management
• Refers to how a government handles its
borrowing and repayment of money that
it owes.
• The goal is to raise funds at the lowest
cost while managing borrowing risks.
• It ensures meeting the government's
financial needs and payment obligations.
• Good debt management protects against
interest rate and currency fluctuations.
Public Debt Management
• It reduces the likelihood of financial
problems affecting the broader economy.

• Effective debt management contributes to

a stable financial system.

• It makes borrowing money cheaper and

safer for the government and the public.
Definition of Terms
Borrowing Costs Payment Obligations Interest Rate Fluctuations
-The expenses incurred -The government's -Changes in the cost of
when the government responsibilities to repay borrowing money, which
borrows money, such as borrowed funds within can impact the
interest rates and fees. specified timeframes. government's repayment
amount and overall debt
burden.

Currency Fluctuations Debt Sustainability Investor Confidence

-Changes in the value of -The ability of the -The trust and belief
money, which can affect government to manage its investors have in the
the government's debt if debt without government's ability to
borrowing is done in compromising its long- manage its debt and meet
foreign currencies. term financial stability. its financial obligations.
Definition of Terms
Debt Instruments Treasury bond
-Different types of -A long-term debt security
financial instruments used issued by the government
by the government to to raise funds. It is
borrow money, such as typically issued with a
bonds, treasury bills, or maturity period of 10
loans. years or more.
Debt Servicing Debt Restructuring
-The repayment of -Making changes to the terms
principal and interest on and conditions of existing
borrowed funds. debt to make it more
manageable, such as
extending repayment periods
or renegotiating interest rates.
Treasury bills
-often referred to as T-
bills, are short-term debt
securities issued by the
government to meet its
short-term financing
needs.
Debt Portfolio
-Collection of outstanding
debts, such as loans and
bonds, that an entity holds
and manages.
Investment
$1.35M
02
Systems of
Public Debt Management
in the Philippines
Systems of PDM in the Philippines
• The systems of public debt
management in the Philippines
encompass various components
and processes that ensure effective
management of the government's
debt portfolio
 Systems of PDM in the Philippines

Investor Debt
Legal and Debt
Relations and Restructuring
Institutional Strategy and Market and Liability
Framework Policies Development Management

Debt Debt Risk

Issuance Recording & Management
Reporting
Monitoring
Systems of PDM in the Philippines
Legal and Institutional Framework
● The public debt management systems in the
Philippines are governed by the Bureau of the
Treasury (BTr), operating under the Department of
Finance.
● The legal framework primarily governed by the
General Banking Law of 2000 provides the
foundation for debt management activities.
● The BTr, through its Debt and Cash Management
Group (DCMG), formulates policies, guidelines, and
procedures related to debt issuance, management,
and reporting.
Systems of PDM in the Philippines
Debt Strategy and Policies
● The Bureau of the Treasury develops a Medium-
Term Debt Management Strategy (MTDS) to guide
the government's borrowing decisions.
● The MTDS outlines the objectives, target debt
levels, and borrowing strategies over a specific
period, typically three to five years.
● It takes into account market conditions, fiscal
targets, and debt sustainability considerations.
● The BTr also establishes policies and guidelines for
debt issuance, refinancing (replacing existing debt
with new debt), and managing risks associated with
debt.
Systems of PDM in the Philippines
Debt Issuance
● The BTr conducts debt issuances through auctions
in the domestic market. It issues various debt
instruments, including treasury bills with maturities
of 91 days, 182 days, and 364 days, as well as
treasury bonds with longer tenors.
● The auctions follow a multiple-price competitive
bidding system, where participants submit bids
specifying the yield (interest rate) they are willing
to accept.
● The BTr determines the winning bids based on the
accepted yields and the total amount to be issued.
Treasury Bonds
In a treasury bond auction, the government of a
country, such as the Philippines, sells bonds to investors
in order to raise funds.
○ Purpose
○ Bond Offering
○ Auction Process
○ Bid Evaluation
○ Allotment
○ Results & Allocation
○ Settlement
○ Bond Characteristics
○ Interest Payments
○ Redemption
Treasury Bonds
In a treasury bond auction, the government of a
country, such as the Philippines, sells bonds to investors
in order to raise funds. Purpose
○ Purpose The government
○ Bond Offering wants to borrow
○ Auction Process money from
○ Bid Evaluation investors to finance
○ Allotment its activities, such
○ Results & Allocation as infrastructure
○ Settlement projects or public
○ Bond Characteristics services. To do this,
○ Interest Payments they offer treasury
○ Redemption bonds for sale.
Treasury Bonds
In a treasury bond auction, the government of a
country, such as the Philippines, sells bonds to investors
in order to raise funds.
Bond Offering
○ Purpose
The government
○ Bond Offering
announces that it
○ Auction Process
will sell a certain
○ Bid Evaluation
amount of treasury
○ Allotment
bonds to the public.
○ Results & Allocation
These bonds are
○ Settlement
essentially loans
○ Bond Characteristics
that investors
○ Interest Payments
provide to the
○ Redemption government.
Treasury Bonds
In a treasury bond auction, the government of a
country, such as the Philippines, sells bonds to investors
in order to raise funds. Auction Process
○ Purpose Interested investors
○ Bond Offering participate in the
○ Auction Process auction by submitting
○ Bid Evaluation bids indicating the
quantity of bonds
○ Allotment
they want to purchase
○ Results & Allocation
and the price they are
○ Settlement willing to pay. The
○ Bond Characteristics auction is typically
○ Interest Payments conducted
○ Redemption electronically through
a platform.
Treasury Bonds
In a treasury bond auction, the government of a
country, such as the Philippines, sells bonds to investors
in order to raise funds.
Bid Evaluation
○ Purpose
After the auction
○ Bond Offering
deadline, the
○ Auction Process
government
○ Bid Evaluation evaluates the bids
○ Allotment received from
○ Results & Allocation investors. They
○ Settlement consider both the
○ Bond Characteristics quantity of bonds
○ Interest Payments requested and the
○ Redemption prices offered.
Treasury Bonds
In a treasury bond auction, the government of a
country, such as the Philippines, sells bonds to investors
in order to raise funds.
Allotment
○ Purpose
The government
○ Bond Offering
decides which bids to
○ Auction Process
accept based on their
○ Bid Evaluation
predetermined criteria.
○ Allotment
They typically prioritize
○ Results & Allocation
bids with higher prices
○ Settlement
or accept bids up to a
○ Bond Characteristics
specific amount,
○ Interest Payments
depending on the total
○ Redemption
bonds available for sale.
Treasury Bonds
In a treasury bond auction, the government of a
country, such as the Philippines, sells bonds to investors
in order to raise funds. Results & Allocation
○ Purpose The government
○ Bond Offering announces the results of
○ Auction Process the auction, including
○ Bid Evaluation the total amount of
○ Allotment bonds sold and the
○ Results & Allocation average price or yield at
○ Settlement which the bonds were
○ Bond Characteristics allocated. Investors who
○ Interest Payments submitted winning bids
○ Redemption are allocated the bonds
they requested.
Treasury Bonds
In a treasury bond auction, the government of a
country, such as the Philippines, sells bonds to investors
in order to raise funds. Settlement
○ Purpose The investors who
○ Bond Offering were allocated
○ Auction Process bonds must pay for
○ Bid Evaluation their purchases
○ Allotment within a specified
○ Results & Allocation timeframe. The
○ Settlement government
○ Bond Characteristics receives the funds
○ Interest Payments and issues the
○ Redemption bonds to the
investors.
Treasury Bonds
In a treasury bond auction, the government of a
country, such as the Philippines, sells bonds to investors
in order to raise funds. Bond Characteristics
○ Purpose Treasury bonds have
○ Bond Offering specific features such
○ Auction Process as maturity date
○ Bid Evaluation (when they must be
○ Allotment repaid), coupon rate
○ Results & Allocation (interest rate paid to
○ Settlement bondholders), and
○ Bond Characteristics face value (the
○ Interest Payments amount investors will
○ Redemption receive at maturity).
Treasury Bonds
In a treasury bond auction, the government of a
country, such as the Philippines, sells bonds to investors
in order to raise funds. Interest Payments
○ Purpose Over the life of the
○ Bond Offering bonds, the
○ Auction Process government pays
○ Bid Evaluation periodic interest
○ Allotment payments to
○ Results & Allocation bondholders based
○ Settlement on the coupon rate.
○ Bond Characteristics These payments
○ Interest Payments are typically made
○ Redemption semi-annually.
Treasury Bonds
In a treasury bond auction, the government of a
country, such as the Philippines, sells bonds to investors
in order to raise funds.
○ Purpose Redemption
○ Bond Offering At maturity, the
○ Auction Process government repays
○ Bid Evaluation the full-face value
○ Allotment of the bonds to the
○ Results & Allocation bondholders,
○ Settlement concluding the
○ Bond Characteristics borrowing process.
○ Interest Payments
○ Redemption
Systems of PDM in the Philippines

Debt Recording and Reporting

● The BTr maintains comprehensive records of the
government's debt transactions, including issuances,
interest payments, and principal repayments.
● These records are recorded in the Government Securities
Registry (GSR).
● The BTr also publishes regular reports on the government's
debt profile, debt servicing costs, and debt sustainability
indicators.
● These reports provide transparency and accountability in
public debt management.
Systems of PDM in the Philippines
Risk Management
● The BTr employs risk management strategies to mitigate
various risks associated with debt. This includes monitoring
interest rate risk (the potential impact of changing interest
rates), currency risk (the potential impact of currency
exchange rate fluctuations), and liquidity risk (the ability to
meet debt payment obligations).
● To manage interest rate risk, the BTr utilizes a liability
management program, which involves assessing the debt
maturity profile and implementing measures to optimize
the debt structure.
● The BTr also monitors foreign exchange exposure and
employs hedging instruments (financial contracts) to
mitigate currency risks.
Systems of PDM in the Philippines

Investor Relations and Market Development

● The BTr engages in investor relations activities to enhance
market confidence and broaden the investor base.
● It conducts regular investor briefings, conferences, and
roadshows to provide updates on the government's debt
management activities and economic outlook.
● The BTr also collaborates with market participants and
stakeholders to develop and deepen the domestic capital
market, ensuring liquidity (availability of funds) and
facilitating efficient debt issuances.
Systems of PDM in the Philippines
Debt Restructuring and Liability Management
● In cases where debt becomes unsustainable, the BTr may
consider debt restructuring or liability management
options.
● This could involve bond exchanges (swapping existing
bonds for new ones), buybacks (repurchasing outstanding
debt), or refinancing activities to optimize debt servicing
costs and manage the maturity profile.
● The BTr may also engage in debt swaps to convert
expensive or high-risk debt into more manageable
obligations.
 03
Significance of
Effective Public Debt
Clients Management
Mercury is a
small planet
Significance of Effective Public Debt
Management

Financial Cost Risk Mitigation Fiscal

Stability Optimization Sustainability

Goal

Investor Economic Policy Debt

Confidence Development Flexibility Sustainability
Significance of Effective Public Debt
Management

Financial Cost Risk Mitigation Fiscal

Stability Optimization Sustainability

Goal

Investor Economic Policy Debt

Confidence Development Flexibility Sustainability
Significance of Effective Public Debt
Management

Financial Cost Risk Mitigation Fiscal

Stability Optimization Sustainability

Goal

Investor Economic Policy Debt

Confidence Development Flexibility Sustainability
Significance of Effective Public Debt
Management

Financial Cost Risk Mitigation Fiscal

Stability Optimization Sustainability

Goal

Investor Economic Policy Debt

Confidence Development Flexibility Sustainability
Significance of Effective Public Debt
Management

Financial Cost Risk Mitigation Fiscal

Stability Optimization Sustainability

Goal

Investor Economic Policy Debt

Confidence Development Flexibility Sustainability
Significance of Effective Public Debt
Management

Financial Cost Risk Mitigation Fiscal

Stability Optimization Sustainability

Goal

Investor Economic Policy Debt

Confidence Development Flexibility Sustainability
Significance of Effective Public Debt
Management

Financial Cost Risk Mitigation Fiscal

Stability Optimization Sustainability

Goal

Investor Economic Policy Debt

Confidence Development Flexibility Sustainability
Significance of Effective Public Debt
Management

Financial Cost Risk Mitigation Fiscal

Stability Optimization Sustainability

Goal

Investor Economic Policy Debt

Confidence Development Flexibility Sustainability
Significance of Effective Public Debt
Management

Financial Cost Risk Mitigation Fiscal

Stability Optimization Sustainability

Goal

Investor Economic Policy Debt

Confidence Development Flexibility Sustainability
 04
Systems of Debt
Management in Private
Education Institutions
Systems of Debt Management in Private Education
Institutions
• A comprehensive system of debt management in a school
organization encompasses several key components and strategies,
illustrated by the following examples:

Develop a detailed budget and financial plan that includes

Budgeting & estimated income from tuition fees, grants, and
Financial Planning donations, as well as projected expenses for salaries,
facilities maintenance, and instructional materials.

Conduct a thorough analysis of the organization's existing debt,

Debt Analysis & such as loans for facility expansions or equipment purchases,
and evaluate the interest rates, repayment terms, and overall
Evaluation impact on the organization's financial health.
Systems of Debt Management in Private Education
Institutions
Implement responsible borrowing practices by exploring
Responsible alternative funding sources, such as securing grants or
Borrowing engaging in fundraising campaigns, before considering
Practices taking on additional debt.

Regularly monitor debt levels to ensure they remain within

Debt manageable limits, such as setting a target debt-to-income
Monitoring & ratio, and implement controls to avoid excessive borrowing
Control that could strain the organization's financial resources.

When borrowing is necessary, negotiate favorable loan terms

Negotiating by seeking competitive interest rates, flexible repayment
Favorable Loan options, and favorable conditions, such as longer repayment
periods, to minimize the financial burden on the school.
Terms
Systems of Debt Management in Private Education
Institutions
Develop effective strategies for debt repayment, such as
Debt Repayment allocating a portion of the school's annual budget
Strategies specifically for debt servicing or exploring opportunities to
refinance existing debt with lower interest rates.

Fostering financial sustainability by maintaining a balanced

Financial budget, diversifying revenue streams through initiatives like
Sustainability and renting out school facilities for events, and implementing risk
Risk Management management strategies to mitigate potential financial risks
associated with debt.

Maintain transparency and accurate reporting by

Debt
Transparency providing regular financial statements to stakeholders,
Restructuring
and Reporting disclosing debt-related information, and ensuring
& Refinancing accountability in the use of borrowed funds.
Systems of Debt Management in Private Education
Institutions
Regularly evaluating the effectiveness of the debt
Continuous management system, such as reviewing the impact of
Evaluation and borrowing on the organization's financial position,
Improvement analyzing interest rate trends, and making necessary
adjustments to improve the management of debt.

• By implementing these strategies, a school organization can effectively

manage its debt, make informed financial decisions, and maintain long-term
financial stability while providing quality education to its students.
Debt
Restructuring
& Refinancing
 Reforms in Third World
Financial Systems

Presented by: Earl Jan L. Santos

Introduction
• Reforming financial systems crucial for
sustainable development and inclusive
growth

• Challenges faced by third world

countries: inefficiencies, inequalities,
limited access to capital

• Comprehensive reforms unlock

potential, create brighter future
 Reforms in Third World Financial
Systems

Strengthening
Enhancing Developing Fostering
Strengthening Governance
Public-Private
Financial Regulatory Local Capital Partnerships
and Anti-
Inclusion Frameworks Markets Corruption
(PPPs)
Efforts
Enhancing Financial Inclusion
• Bridging the gap in third world countries'
access to financial services
• Expanding banking networks and
embracing fintech solutions
• Examples: GCash, PayMaya
• Promoting financial literacy programs
Strengthening Regulatory Frameworks
• Vital for stability and consumer protection
• Measures implemented by the Philippines
(Bangko Sentral ng Pilipinas)
• Stricter Anti-Money Laundering Measures
• Enhanced Prudential Regulations
• Increased Monitoring and Supervision
• Strengthened Consumer Protection
• Collaboration with International Organizations
Developing Local Capital Markets
• Mobilizing domestic savings, attracting
investments
• Encouraging companies to list on local stock
exchanges
• Establishing credit rating agencies and financial
institutions
• Examples: Philippine Stock Exchange,
Philippine Dealing & Exchange Corporation
Fostering Public-Private Partnerships (PPPs)
• Collaboration for infrastructure development
• Clear legal frameworks, transparency,
accountability, risk-sharing
• Leveraging private sector expertise and
resources
• Example: Public-Private Partnership Center of
the Philippines
Strengthening Governance and Anti-Corruption Efforts
• Enhancing transparency, accountability, ethical
conduct
• Combating corruption, money laundering, and
terrorist financing
• Collaboration between government agencies
and anti-corruption bodies
• Example: Anti-Money Laundering Council
 Thanks!
Do you have any questions?
earljansantos77@gmail.com
+639 42808 1428 Fixed costs
Values 450 K

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