GROSS BORROWINGS by the National Government from domestic and external sources hit P2.58 trillion in 2021, as it continued to finance its pandemic response, data from the Bureau of the Treasury (BTr) showed.

The bureau’s most recent cash operations report showed that total borrowings slipped by 5.9% year on year to P2.58 trillion as of end-December 2021.

Local debt accounted for 78% of this total, while the rest was sourced from foreign creditors.

In December alone, total gross borrowings resulted in a net redemption of P196 billion, which means debts paid back were larger than new borrowings.

Total gross domestic debt that month resulted in a net redemption of P236 billion. This was smaller than the P465-billion net redemption logged in the same month the previous year.

The BTr raised P360 billion from retail Treasury bonds in December, while there was a net redemption of Treasury bills worth P56 billion.

It repaid P540 billion to the central bank for its advances.

Meanwhile, gross external borrowings in December reached P39.86 billion, down nearly 75% year on year.

The government that month took out P13.74 billion in new project loans and P26.12 billion in program loans from foreign sources.

Breaking down total gross borrowings for the year, local debt accounted for P2.01 trillion of the total, inching up by 0.59% year on year.

Broken down, the bulk of local gross borrowings were sourced from fixed-rate Treasury bonds that amounted to P1.26 trillion. Another P823.35 billion came from retail Treasury bonds. Meanwhile, retail onshore dollar bonds reached a total of P80.84 billion.

Treasury bills resulted in a net redemption of P153.34 billion.

Meanwhile, gross external borrowings hit P568.67 billion, slipping by 23.4% year on year.

Broken down, the bureau raised P146.17 billion from global bonds, P121.97 billion from euro-denominated notes, and P24.19 billion in Japanese yen-denominated securities.

The government also recorded P166.1 billion in program loans along with P110.24 billion in project loans.

The government borrows from local and foreign sources to finance a widening budget deficit after the coronavirus pandemic stalled the economy and pulled down tax collections.

Outstanding debt reached a record P12.03 trillion at the end of January this year after it took out another zero-interest loan from the central bank and borrowed locally.

The National Government’s debt level increased by 16.5% year on year. — Jenina P. Ibañez