Gov’t borrowings surge to P309 B

MANILA, Philippines — The national government’s gross borrowings in the first two months rose almost two-fold compared to year-ago level due to the higher volume of domestic securities issued during the period, according to the Bureau of the Treasury.

According to the latest cash operations report of the BTr, gross borrowings from January to February amounted to P309.13 billion, almost twice higher than the P154.83 billion posted in the same period in 2018.

This is despite the 44.59 percent drop in borrowings for February alone to P60.33 billion from P108.87 billion in the same month last year.

 The government borrows from both local and foreign creditors to finance its fiscal deficit, which is currently capped at 3.2 percent of gross domestic product (GDP) this year.

 According to Treasury data, P192.62 billion of the total debt in the first two months came from domestic lenders, while the remaining P116.52 billion was sourced from external creditors.

 Domestic debt, for its part, jumped more than seven times compared to the end-February 2018 level of P26.21 billion.

 More than half or P101.5 billion of the total domestic obligations was raised through the issuance of Treasury bonds, a significant improvement from P23.74 billion last year.

 Another P91.11 billion was sourced from the issuance of Treasury bills, also higher compared to last year’s level of P2.47 billion.

 The high demand for securities, as well as declining rates prompted the Treasury to make full awards on most of its auctions. Aside from the regular auctions, the BTr also opened the access to the tap facility for top government securities eligible dealers and the over-the-counter facility for tax-exempt state corporations.

 Meanwhile, external borrowings from January to February declined by 9.41 percent to P116.52 billion from P128.62 billion in the same period last year.

 About P78.04 billion of this amount came from the international market through the issuance of dollar-denominated global bonds last January.

 The Philippines also received P36.84 billion in program loans, and another P1.64 billion in project loans from multilateral agencies and development partners.

 In 2018, the national government borrowed P947.55 billion from both domestic and foreign lenders, up 5.09 percent from P901.67 billion in 2017.

For 2019, the national government is expected to borrow P1.19 trillion, 20 percent higher than the 2018 program of P986 billion, in expectation of the higher fiscal deficit ceiling this year.

 Of the total borrowings this year, P297.2 billion is projected to come from foreign lenders, while the remaining P891.7 billion would be sourced from domestic creditors.