GROSS BORROWINGS rose 12.2% from a year ago to P1.933 trillion in the first half as the government continued to raise more funds for its pandemic response.
Data from the Bureau of the Treasury (BTr) showed borrowings in the January-June period were larger than the P1.723 trillion recorded in the same period last year.
In June, the Treasury raised P167.198 billion, 21.6% down from P213.227 billion a year ago.
The government borrows from local and foreign creditors to finance the budget deficit that has widened since last year when the coronavirus pandemic stalled the economy and pulled down tax collections.
Broken down, new debt incurred from the local market slipped by 13.5% to P135.29 billion from P156.41 billion in June last year.
The month saw P46.71 billion in net issuance of Treasury bills (T-bills) — where more debt repayments were made than new debts incurred. This partially offset the P182 billion of Treasury bonds (T-bonds) sold.
The Treasury made P113 billion in redemptions using the government’s Bond Sinking Fund.
Meanwhile, external gross borrowings slumped by 43.8% to P31.91 billion in June from P56.817 billion a year ago. This consisted of P22.958 billion in new program loans and P8.95 billion in project loans.
It settled P6.846 billion of its outstanding foreign debt that month, reducing its net external borrowings to P25.062 billion.
Of the P1.9 trillion in the first semester, gross borrowings from local lenders totaled P1.648 trillion, up 25.8% from P1.31 trillion the year before.
This was comprised of P571 billion in T-bonds, P540 billion of loans from the central bank, P463.32 billion in retail T-bonds, and P73.6 billion in T-bills.
Excluding P53.108-billion debt repaid and those that were settled via the Bond Sinking Fund, the government’s net domestic borrowings hit P1.59 trillion.
On the external side, total gross borrowings from foreign creditors slid by 31% to P284.95 billion in the first half from P413 billion seen in the same period last year.
This was comprised of P122 billion in euro-denominated bonds, P95.1 billion in program loans, P43.7 billion in project loans and P24.2 billion in Samurai bonds.
The BTr repaid a total of P160 billion of foreign loans, cutting its net foreign borrowings to P124.92 billion.
Gross borrowings in the first half accounted for 64% of the P3 trillion the government is planning to raise this year from both local and foreign lenders to plug its budget deficit seen to hit 9.3% of gross domestic product (GDP).
In its latest economic bulletin on Sunday, the Department of Finance said the government’s fiscal standing, along with accommodative monetary policy, absorbed the shocks brought about by the coronavirus pandemic and will continue to do so to support the recovery.
“Government-owned and -controlled corporations (GOCCs) continue to contribute to revenue mobilization through hefty dividends. Unlike in previous crises, especially in the 1980s when GOCCs contributed to the widening fiscal deficit due to their poor financial conditions, GOCCs are now in tip-top financial shape as a result of GOCC reforms including closer monitoring and performance evaluation,” it said.
The country’s debt stock reached P11.166 trillion as of end June. — B.M.Laforga