Borrowings rise 37% to P662 B in 10 months

MANILA, Philippines — The national government borrowed P661.76 billion from both domestic and foreign lenders in the first 10 months of the year, data from the Bureau of the Treasury (BTr) showed.

In its latest cash operations report, the Treasury said the government’s gross borrowings as of end-October rose 37.31 percent to P661.76 billion from P481.96 billion in the same period last year.

For the month of October, alone, government debt stood at P37.98 billion, more than two-fold the P16.92 billion recorded in the same month in 2016.

The government borrows from the local and foreign creditors to pay maturing debt and finance its budget deficit, which is targeted at three percent of the country’s gross domestic product.

Treasury data showed P499.61 billion of the total borrowings during the 10-month period came from domestic lenders. This is higher by 47.32 percent than domestic borrowings the same period last year, which reached to P339.14 billion.

Broken down, bulk of local borrowings came in the form of fixed-rate Treasury bonds amounting to P259.82 billion. Another P57.94 billion was raised through the sale of Treasury-bills.

The remaining P181.85 billion was acquired through the offering of retail Treasury bonds to the general investing public last April. The RTBs, which were sold at a coupon rate of 4.25 percent, was intended to support the administration’s infrastructure development thrust.

Meanwhile, foreign debt as of end-October also rose 13.54 percent to P162.15 billion from P142.81 billion a year ago.

About P99.57 billion of this amount was raised through the sale of global bonds last February. Under this fund-raising activity, the government generated $500 million from the issuance of fresh 25-year global bonds at a rate of 3.7 percent. Another $1.5 billion in debt were swapped.

Other foreign borrowings also came in the form of project loans (P27.47 billion), and program loans (P35.11 billion) from multilateral agencies, such as the World Bank, Asian Development Bank and the Japan International Cooperation Agency.

Earlier, the Development Budget Coordination Committee revised its borrowing ceiling in 2017 to P727.64 billion from the original P631.3 billion.

For 2018, the national government is programmed to borrow P889.51 billion from local and foreign lenders. Of this amount, P176.26 billion will come from foreign financing, while the remaining P711.8 billion will be borrowed domestically.

Meanwhile, the national government’s outstanding debt as of end-September continued to grow to P6.44 trillion owing to the net issuance of domestic securities.

Despite this, the country’s debt-to-GDP ratio in the third quarter of 2017 declined to 41.7 percent from 43 percent the same quarter last year.