Government borrowings hit P90 B in March

MANILA, Philippines – Government’s return to the offshore investor market pushed up its borrowings to their highest level in more than three years in March, data from the Bureau of the Treasury showed.

Gross borrowings totaled P90.07 billion, up more than three-fold from P29.96 billion a year ago.

It was also the biggest monthly record in 39 months or since the P102.45 billion posted in December 2012.

The government borrows from local and foreign markets to finance its budget deficit and pay existing debts.

Broken down, domestic borrowings reached P28.76 billion in March, while external borrowings amounted to P61.32 billion.

Foreign liabilities, in particular, ballooned from just P3.36 billion last year after the Aquino administration issued $2 billion worth of 25-year global bonds in the middle of February.

It was not clear why the transaction was only recorded in March. The issuance added P41.26 billion to the borrowings that month, data showed.

In December 2012, state financing requirements also surged after it raised $500 million from 10.5-year dollar bonds sold to local investors.

Both issuances were credited into the government’s liability management program. Under it, existing debts with high interest rate are replaced with new ones carrying much lower rate to save on interest payments.

Of the $2 billion in March, for instance, $1.5 billion was used to retire old debts, while only $500 million was allocated for the budget, the Treasury had said.

Aside from the global bonds, program loans worth P18.73 billion from the Asian Development Bank also added into external credits.

There were also the withdrawals on specific project loans worth P1.33 billion from other multilateral institutions such as the World Bank.

In the domestic front, Treasury bonds and bills — issued every month to local investors-- cornered the bulk of the borrowings in March, figures showed.

The government posted a net floatation of T-bills amounting to P3.76 billion. This means it issued more new papers than settled existing ones during the period.

An additional P25 billion in T-bonds were also recorded.

As of the first quarter, gross borrowings already reached P159.04 billion, up 57.65 percent from P100.88 billion last year.