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Government borrowings surge in May

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STATE gross borrowings more than doubled in May, as the government continued to raise funds here and abroad for its pandemic response, bringing the five-month total to P1.509 trillion.

Data from the Bureau of the Treasury (BTr) showed the National Government’s gross borrowings stood at P289.817 billion in May, up 130.7% from P125.61 billion borrowed in the same month in 2019.

Excluding P6.289 billion in repayments made to external lenders, net borrowings for May reached P283.528 billion. The government did not make any amortization for its local debt in that month.

Domestic borrowings accounted for 58.8% of the total, while 41.2% were from external creditors.

The government raised a total of P170.51 billion through the issuance of government securities, up 234.94% from the P50.91 billion borrowed in the same month in 2019. Of which, P95 billion were raised from the issuance of Treasury bonds (T-bonds) and P75.51 billion from Treasury bills (T-bills).

Meanwhile, gross borrowings from foreign creditors hit P119.307 billion, up 59.72% from the P75 billion raised a year ago.

The P118.735 billion was raised from the government’s issuance of global bonds on May 5, while P572 million was sourced through project loans.

In late April, the government sold $2.35 billion in dollar-denominated global bonds: $1.35 billion in 25-year bonds with a coupon of 2.95% and $1 billion via 10-year notes at 2.457%.

In five months to May, gross borrowings hit P1.509 trillion, already exceeding the P1.02 trillion raised for the entire 2019.

The government borrows from local and external lenders to fund its budget deficit that is seen to hit 8.4% of gross domestic product (GDP) this year.

The budget deficit is expected to widen as tax revenues plunge due to weak economic activity and state spending rises amid the coronavirus pandemic.

Finance Secretary Carlos G. Dominguez III had said that the government will cap the deficit level to 9% of GDP to maintain the country’s healthy financial standing.

The country’s total debt-to-GDP ratio is projected to rise to 49.8% at the end of 2020, 51.5% in 2021 and 52.3% by 2022.

The economy is seen to contract 2-3.4% this year. — Beatrice M. Laforga





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