THE NATIONAL Government’s (NG) gross borrowings fell in September, mainly due to a decline in domestic debt, the Bureau of the Treasury (BTr) reported.

Data from the BTr showed that NG’s gross borrowings plummeted by 76.79% to P103.246 billion in September from P444.874 billion in the same month a year ago.

Month on month, borrowings were also 16.8% lower than P124.056 billion in August.

Domestic debt accounted for the bulk or 89% of total gross borrowings during the month.

Gross domestic borrowings plunged by 78.92% to P92.067 billion in September from P436.709 billion in the same month in 2022.

Broken down, the BTr raised P61.064 billion from fixed-rate Treasury bonds and P31.003 billion from Treasury bills.

Meanwhile, external borrowings jumped by 36.91% year on year to P11.179 billion from P8.165 billion. This consisted entirely of new project loans.

In the first nine months, the NG’s gross borrowings slipped by 2.28% to P1.78 trillion from P1.82 trillion in the same period a year ago.

Domestic borrowings stood at P1.38 trillion, lower by 6.86% from P1.48 trillion in the previous year.  This accounted for 77% of total gross borrowings in the nine months to September.

The BTr raised P965.828 billion from the issuance of fixed-rate Treasury bonds, P283.763 billion from retail Treasury bonds, and P126.845 billion from Treasury bills.

Meanwhile, gross external debt climbed by 17.28% to P405.741 billion in the January-September period from P345.959 billion a year ago.

This was composed of P163.607 billion in global bonds, P145.059 billion in program loans, and P97.075 billion in new project loans.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that the decline in gross borrowings was likely due to the narrow budget deficit and maturing government bonds in August and September.

“The narrower budget deficit from January-September fundamentally reduced the need for the National Government to borrow,” he said in a Viber message.

In the first nine months, the NG’s budget deficit narrowed by 2.89% to P983.5 billion from P1.01 trillion a year ago. This was also 11% lower than the P1.106-trillion program for the period.

“Some frontloading of borrowings earlier this year when interest rates were still lower also reduced the latest National Government borrowing data,” Mr. Ricafort added.

Oikonomia Advisory & Research, Inc. President and Chief Economist John Paolo R. Rivera said that high interest rates also reduced the capacity to borrow.

The Bangko Sentral ng Pilipinas (BSP) delivered an off-cycle 25-basis-point (bp) rate hike in October, bringing the benchmark rate to a 16-year high 6.5%. Since May 2022, the central bank has hiked rates by a cumulative 450 bps.

“Data from the previous months have shown underspending for many agencies which prompted them to spend instead of borrow. Other than that, reduced borrowing may indicate that there are funding sources available besides borrowing,” Mr. Rivera added.

For 2023, the National Government set its borrowing program at P2.207 trillion, consisting of P1.654 trillion from domestic sources and P553.5 billion from foreign creditors. — Luisa Maria Jacinta C. Jocson