Hong Kong seeks to raise bond issuance ceiling to HK$900 billion

The Hong Kong government is seeking legislative approval to significantly increase its capacity to raise debt for infrastructure financing. Financial Secretary Paul Chan Mo-po proposed raising the borrowing ceilings for the Government Sustainable Bond Programme and the Infrastructure Bond Programme from HK$700 billion to HK$900 billion (approximately US$115 billion) in his February budget. The primary driver is to secure funding for large-scale development projects, most notably the ambitious Northern Metropolis megaproject. Officials, including Permanent Secretary for Financial Services Andrew Lai Chi-wah, have assured legislators that the new HK$200 billion increase should be sufficient to cover the government's financing needs for the next two to three years, barring any major unforeseen events.

During a Legislative Council subcommittee meeting, officials addressed concerns about future borrowing needs. While confident in the medium-term sufficiency of the HK$900 billion cap, Andrew Lai did not rule out the possibility of further increases down the line to accommodate new projects that may emerge from the Northern Metropolis development or to accelerate its pace. A key point of reassurance for fiscal stability is the projected debt-to-Gross Domestic Product (GDP) ratio. Even with the increased borrowing, officials estimate this ratio will stand at 19.9%, which they describe as a healthy level that remains lower than that of many other developed economies. This move signals a strategic shift towards using bond markets more aggressively to fund long-term capital projects that drive economic growth.