Gov’t scales down borrowing by 35%

MANILA, Philippines - The government borrowed P25.055 billion in February, down 35 percent from the P38.51 billion borrowings in the same month last year.

Data from the Department of Finance showed 96.8 percent or P24.24 billion of total borrowings came from the domestic market, mainly from the sale of Treasury bonds.  The amount represented a 35 percent decline from P37.33 billion recorded in February last year.      

The country continues to depend heavily on domestic borrowings to take advantage of strong liquidity in the local financial system and help ward off pressures on the exchange rate.

Borrowings for the first two months of the year amounted to P52.13 billion, 79.84 percent lower than the P79.84 billion recorded in January to February 2013.

The government borrows from both local and foreign sources to pay maturing obligations and plug the deficit in its budget.

The country’s deficit narrowed 17 percent in February to P9.7 billion as revenues outpaced total expenditures.

For this year, the Aquino administration has programmed to borrow P715 billion, of which P620 billion will be sourced from the local market.

In the second quarter, the government plans to issue P135 billion worth of debt papers to local lenders as part of its borrowing program.

Of the total, P75 billion will be raised through the sale of short-tenored Treasury bonds while P60 billion will come from the issuance of Treasury bills.