Gross borrowings hit P2.4T

GROSS BORROWINGS by the National Government reached P2.387 trillion in the first eight months of the year as it continued to raise funds for the pandemic response, data from the Bureau of the Treasury (BTr) showed.

Based on preliminary data from the BTr, the eight-month borrowings were 3.52% smaller compared with the P2.47 trillion logged in the January-August period last year. The government sold retail Treasury bonds (RTBs) in August 2020.

In August alone, the BTr incurred P117.74 billion in new debts, down by 81% from the P612.913 billion in the same month last year, following the P516-billion RTB issuance in the same month a year ago. This was also 65% smaller when compared with P337.15 billion recorded in July.

Local borrowings accounted for 85.75% of the total.

Domestic borrowings stood at P100.967 billion in August, slumping by 82.7% from P584.4 billion a year ago. Month on month, new local debts also declined by 44% from P180.36 billion in July.

During the month, the government raised P132 billion via the weekly offering of Treasury bonds (T-bonds). This was partly offset by the P31 billion in net issuance of Treasury bills (T-bills).

Excluding the P171-million amortization, net domestic borrowings hit P100.796 billion in August.

Meanwhile, gross external borrowings stood at P16.77 billion in August, dropping 41.2% from P28.54 billion recorded a year ago and much smaller than the P156.79 billion in July.

The government obtained P12.17 billion in new foreign project loans in August, and another P4.6 billion via program loans.

It also made P50.98 billion in amortization payments. This resulted in a net redemption worth P34.21 billion in August.

Year to date, the government’s new debt accounted for 80% of the P3-trillion borrowing plan for the entire year. This consisted of 81% in domestic debt and 19% in foreign loans as the state prefers sourcing the majority of its debt from the local market to minimize external risks and foreign-currency fluctuations.

Gross domestic borrowings dipped 1.6% to P1.929 trillion during the January to August period. This was made up of P911.86 billion in T-bonds, P463.3 billion in RTBs, P540 billion in short-term borrowings from the central bank, and P14 billion in T-bills.

Net borrowings for the period reached P1.876 trillion, after the BTr repaid P405.4 billion of its maturing obligations.

Gross external borrowings for the eight-month period fell by 10% to P458.51 billion from P509.7 billion a year ago.

The Treasury raised P146.17 billion from global bonds, P121.97 billion from euro-denominated notes, and P24.19 billion in Japanese yen-denominated securities. It also incurred P99.69 billion in program loans, and P66.5 billion in project loans.

The government repaid P212.52 billion of its outstanding foreign debt so far, resulting in P245.99 billion in net external borrowings for the period.

The government borrows from local and foreign sources to plug a budget deficit seen to hit 9.3% of gross domestic product (GDP) this year.

The state’s outstanding debt surged 21% to P11.64 trillion at the end of August.

Economic managers are planning to scale down borrowings starting next year as part of its debt consolidation plan.

The debt stock is projected to hit 59.1% of GDP by yearend and peak at 60.8% in 2022, before easing to 60.7% in 2023 and to 59.7% in 2024. — Beatrice M. Laforga