National Government borrowings reach P661 billion in Jan-April

MANILA, Philippines — The national government’s borrowings almost tripled to P661.52 billion in the first four months, with the administration continuing to rely more heavily on domestic lenders, the Bureau of the Treasury (BTr) reported.

Data from the BTr showed that gross borrowings from January to April rose more than 2.7 times to P661.52 billion from P242.87 billion recorded in the same four-month period in 2018.

For the month of April alone, borrowings inched up by 3.35 percent to P37.92 billion from P36.692 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 gross domestic product (GDP) this 2019.

Based on BTr data, bulk or P525.11 billion of the gross borrowings in the January to April period came from domestic lenders, while the remaining P136.41 billion was sourced from external creditors.

Domestic financing, for its part, was more than 5.5 times higher than the P95.01 billion posted in the same period last year.

Of the total domestic debt, P235.83 billion came from the issuance of retail Treasury bonds last March.

To recall, 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.

Treasury bonds, meanwhile, accounted for P161.50 billion of the total domestic borrowings during the period, while Treasury bills raised P127.78 billion.

On the other hand, the BTr said foreign borrowings in the first four months declined by 7.74 percent to P136.41 billion from P147.86 billion in the same period last year.

The Treasury said P78.04 billion of this amount came from the issuance of US dollar-denominated global bonds last January.

The fund raising activity marked the government’s successful return to the international market, which resulted in 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.

Multilateral agencies, such as World Bank, Asian Development Bank and Japan International Cooperation Agency, also extended program loans and projects loans to the Philippines amounting to P48.34 billion and P10.03 billion, respectively.

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.