National Government borrowings reach P624 billion in 1st quarter

MANILA, Philippines — The national government’s borrowings in the first quarter tripled to P623.6 billion following the issuance of Retail Treasury Bonds (RTBs) to small investors last March, according to the Bureau of the Treasury.

According to the BTr, gross borrowings in the first quarter surged to P623.6 billion, about three times higher than the P206.18 billion recorded in the same period in 2018.

This happened as the government’s debt for March alone jumped more than six times to P314.47 billion from P51.35 billion in the same month last year.

The government borrows from both local and foreign creditors to plug its fiscal deficit, which is currently capped at 3.2 percent of the 2019 gross domestic product (GDP).

Based on BTr data, the bulk or P490.62 billion of the total borrowings in the first three months came from domestic lenders, while the remaining P132.98 billion came from external creditors.

Domestic borrowings, in particular, ballooned by almost eight times in the first quarter as compared to the P61.78 billion recorded in the same period last year.

The Treasury said P235.83 billion of the total domestic debt during the period came from the issuance of RTBs last March.

The Treasury was able to raise P235.8 billion from the two-week offering of five-year RTBs from Feb. 26 to March 8. This volume was almost eight times higher than the initial size of P30 billion set for the RTB offering. The debt papers were priced at a coupon rate of 6.25 percent.

Another P141.50 billion came in the form of fixed-rate Treasury bonds, while the remaining P113.28 billion was raised from the issuance of Treasury bills from the BTr’s regular auctions.

On the other hand, the BTr said foreign borrowings in the first quarter declined by nearly eight percent to P132.98 billion from P144.40 billion in the same period last year.

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

The government also received program and project loans during the quarter amounting to P48.34 billion and P6.6 billion, respectively, coming from various 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.