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Government borrowings surge to P1.7T in 1st half

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THE National Government’s borrowings surged to P1.723 trillion in the first half, as it incurred more debt to boost its war chest in the fight against the coronavirus disease 2019 (COVID-19).

The borrowings in the six-month period already exceeded the P1.02 trillion borrowing for 2019.

Data from the Bureau of the Treasury (BTr) showed borrowings nearly quadrupled to P213.227 billion in June. Month on month, June borrowings were 26.43% lower than P289.82 billion in May.

Excluding repayments, net borrowings for the month reached P206.401 billion.

The bulk (73.35%) was borrowed from domestic lenders while 26.65% came from external creditors.

Funds raised domestically reached P156.41 billion in June, almost four times the borrowing a year ago. The government raised P76.41 billion via Treasury bills and P80 billion in Treasury bonds.

Gross borrowings from foreign lenders stood at P56.817 billion, almost four times the level a year ago after program loans rose by more than five times to P53.512 billion.

Latest data from the Finance department showed the government has raised $7.63 billion (P375 billion) from foreign loans and grants as of July 1. Of which, seven were issued in June: a $500-million loan agreement from the World Bank; a $750-million loan from the Asian Infrastructure Investment Bank; two loans worth $900 million from the Asian Development Bank; two loans worth $275.7 million from the Agence Française de Développement (AFD) and a $18.36-million grant from the government of Ja pan.

The government earlier set a P1.4-trillion borrowing program for 2020. A revised borrowing program to reflect the impact of the pandemic has not been released.

The government borrows from local and external lenders to fund the budget deficit seen to hit 8.4% of gross domestic product (GDP) this year. The deficit may reach up to 9% of GDP if the proposed P 140-billion stimulus measure via the Bayanihan II bill is passed.

The country’s total debt-to-GDP ratio was forecast to jump to 49.8% at the end of 2020, from an all-time low of 39.6% level last year. This is seen to further rise to 51.5% in 2021 and 52.3% by 2022.

The government estimated the economy will contract by 2-3.4% this year. — B.M.Laforga





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