MANILA, Philippines — The national government’s borrowings soared by 5.5 times to P248.8 billion in the first month following the Philippines’ return to the global bond market, according to the Bureau of the Treasury.
According to Treasury data, the country’s gross borrowings in January surged by 441 percent to P248.8 billion from P45.96 billion in the same month last year.
Of this amount, P115.62 billion came from external creditors, while the remaining P133.18 billion came from domestic lenders.
The government borrows from both local and foreign creditors to finance its fiscal deficit, which is capped at 3.2 percent of gross domestic product (GDP) for this year.
For January alone, gross external borrowings jumped by more than six-fold compared to the P18.28 billion recorded in the same month in 2018.
The bulk of the amount was raised through the sale of global bonds, which accounted for P78.04 billion of total borrowings.
The government last January successfully returned to the international capital market with the issuance of $1.5 billion worth of 10-year US dollar-denominated global bonds.
The debt papers carried an all-in yield of 3.75 percent, 110 basis points higher than the US Treasury rates. This was likewise 130 basis points lower than the initial pricing guideline.
Moreover, the BTr said the government was also able to secure last January P36.84 billion in program loans and P741 million in project loans from multilateral agencies and development partners.
Likewise, domestic borrowings last January increased by 381 percent to P133.18 billion from P27.68 billion in 2018.
Of the amount, P71.50 billion was sourced through the issuance of fixed-rate Treasury bonds, which is almost five times higher than the P14.89 billion issued last year.
The sale of Treasury-bills raised P61.67 billion, also almost five-fold higher than the P12.79 billion in the same month a year ago.
For full-year 2018, the national government’s gross borrowings grew by 5.09 percent to P947.55 billion from P901.67 billion in 2017.
This is expected to increase to P1.19 trillion this year as a result of the higher fiscal deficit ceiling this year.
Meanwhile, the BTr, in a separate report, said it has spent P77.61 billion to settle the national government’s obligations in January. This is 7.4 percent lower than the P83.81 billion in the same month a year ago.
Of the total debt payments in January, the Treasury said P45.92 billion went to interest payments, 5.52 percent higher than last year’s level of P43.52 billion.
Principal payments, on the other hand, dropped by 21.33 percent to P31.7 billion from P40.29 billion a year ago.
The government allots a portion of its budget for debt payments to settle obligations on a monthly basis, depending on their maturity.
The national government is programmed to spend P887.91 billion for debt service, based on the 2019 BESF. This is 14.5 percent higher than the actual debt payments made in 2018.