Government borrowings down 44.5% in July

MANILA, Philippines - Less withdrawals from multilateral loans pushed government borrowings down by double-digit levels in July as the Aquino administration maintained a strong cash position to finance public projects.

Gross borrowings plunged 44.5 percent to P33.39 billion in July from P60.21 billion in the same period a year ago, according to report from the Bureau of Treasury.

The latest figure brought the seven-month tally to P219.64 billion, down 6.4 percent from the previous year. With only five months left into the year, the government has only borrowed about a third of its program under the 2015 budget.

Broken down, foreign borrowings reached P5.449 billion in July, while borrowings from domestic sources amounted to P27.945 billion. Both segments experienced a year-on-year decline of 81.6 percent and 10.75 percent, respectively.

Specifically for foreign financing, the government’s program loans with multilateral lenders such as the Asian Development Bank (ADB), World Bank and Japan International Cooperation Agency, dropped during the month.

Program loans – or those lent by agencies for particular development programs of the government – amounted only to P2.572 billion, a sharp 90.4 percent decline from a year ago.

For July, loans came only from the ADB’s Social Protection Support Project (P632 million) and two programs from the World Bank on social welfare (P570 million) and “development reform” (P1.370 billion), data showed.

Meanwhile, foreign project loans – or those used to finance specific projects by specific state agencies – barely moved to P2.877 billion from P2.901 billion during the same period.

For the first seven months, program loans inched down to P49.049 billion, while project loans almost doubled to P17.144 billion.

On the domestic front, the government borrowed mainly through the issuance of Treasury bonds and bills. A total of P25 billion in five-year T-bonds and P2.945-billion worth of shorter-termed T-bills were floated.

T-bill issuances rose slightly from P2 billion last year, while those of T-bonds went down 13.6 percent from P28.95 billion.

From January to July, government issuance of T-bonds amounted to P122.385 billion, while those of their shorter-termed counterparts reached P99.920 billion.

The government borrows from the local and foreign markets to finance its budget deficit programmed to hit P284 billion this year. As of July, however, the budget gap – the difference between revenues and expenditures – only totaled P18.5 billion.

Aside from budgetary requirements, the government also borrows to pay maturing debts.

For the first seven months, about 83 percent or P182.184 billion of the borrowed funds were used to refinance maturing debts, data showed.