Government borrowing rises sharply in Nov.

Posted on January 10, 2017

GOVERNMENT borrowing surged in November, according to the Bureau of Treasury (BTr), amid a sharp rise in domestic loans.

The Asian Development Bank is the largest source of program loans -- borrowing P28.28 billion, or 88% of the total loans from multilateral lending institutions. -- BERNARDINO P. TESTA
The government borrowed a total of P24.2 billion in November, from the P3.3 billion recorded in the same month in 2015.

During the month, the state borrowed P23.4 billion domestically, bringing local loans to almost 97% of the financing portfolio, with funds from foreign sources amounting to only P801 million -- the lowest level in nine months.

Domestic borrowing in November grew 816% from a year earlier, while foreign borrowing grew 1.9%.

In the 11 months to November borrowing totaled P452.2 billion, up 42% from a year earlier.

The government raised P233.95 billion from auctions of Treasury bonds as of end-November, up from P173.33 billion a year earlier. Treasury bill issuances also increased to P28.54 billion from minus P7.76 billion a year earlier.

In turn, domestic payments in the 11 months fell to P112.24 billion from P153.87 billion a year earlier.

Project loans amounted to P16.34 billion, down from the P23.88 billion a year earlier. Program loans on the other hand amounted to P32.13 billion, also down sharply, from P66.17 billion previously.

The state sourced the majority of its program loans from The Asian Development Bank (ADB), borrowing P28.28 billion, or 88% of the total loans from multilateral lending institutions.

The government aims to borrow up to P180 billion in the first quarter of 2017, which would be about a third higher year on year.

In the latest inter-agency Development Budget Coordination Committee (DBCC), economic managers said they will retain an 80%-20% financing mix, in favor of local sources, until 2022.

They also said that they will cap the budget deficit at 3% of gross domestic product (GDP) throughout the current government’s term, with deficits to help finance heavy infrastructure spending in the next five years. -- E.J.C. Tubayan