GROSS BORROWINGS by the National Government (NG) more than doubled to P2.74 trillion last year on the huge loans obtained amid a coronavirus pandemic, the Bureau of the Treasury (BTr) reported.

The latest cash operations report of the BTr showed NG’s borrowings were 168.63% higher than the P1.02-trillion total borrowings recorded in 2019. It also nearly matched the P2.757-trillion debt incurred from 2017 to 2019.

Local debt accounted for 73% of the total, with the rest sourced offshore.

In December alone, gross borrowings resulted in a net redemption, or when more debts were repaid than new debts obtained, at P306.69 billion.

The total domestic debt resulted in a net redemption of P476.238 billion in December, a turnaround from the P11.977-billion gross borrowings the year prior.

The BTr issued P70 billion in Treasury bonds (T-bonds) through its fortnightly auctions of the securities, and another P6.53 billion in retail Treasury bonds (RTB). All the Treasury bills (T-bills) issued that month were offset by the total repayments made for the government securities worth P41.52 billion.

The Treasury repaid the P540-billion loan extended by the central bank in December, but borrowed the same amount later that month to further support the government’s pandemic response.

This fully offset the new loans worth P158.775 billion obtained in December from external creditors, which rose by 625% from P21.911 billion the year prior.

Broken down, the government in December took out P16.155 billion in new project loans, P10.556 billion in program loans, and issued P132.064 billion worth of global bonds.

In December, the Philippines returned to the US bond market for the second time in 2020, raising $2.75 billion (P132 billion).

Minus the P6.926 billion repayments made, the net December borrowings reached P151.85 billion, up 948% year on year.

For the entire 2020, net borrowings, or the total debt minus the repayments made, reached P2.5 trillion. This was 185% higher than the P876.296 billion logged in 2019.

This included P1.998 trillion in gross domestic debt, up 188% from P693.843 billion a year ago.

The government also paid P440.40 billion in amortization for its local debt last year, resulting in a net local borrowings of P1.898 trillion. 

New foreign loans incurred totaled P742.412 billion in 2020, up 130% against P321.947 billion seen the year before.

This was made up of P375.198 billion in program loans, P250.799 billion in dollar-denominated global bonds sold, P67.329 billion in euro bonds, and P49.086 billion in new project loans.

Less the P141.653-billion repayments made, net external borrowings hit P600.759 billion, climbing by 225% year on year.

The government is looking to raise P3 trillion this year from domestic and external lenders to help fund its budget deficit seen to hit 8.9% of gross domestic product. — Beatrice M. Laforga