Gov't borrowings up 34% to P917 billion in Jan-Sept

MANILA, Philippines — The national government’s borrowings rose to P917.28 billion in the first nine months as debt from both domestic and external lenders increased, according to the Bureau of the Treasury (BTr).

According to the latest data from the BTr, the national government’s gross borrowings from January to September was 34.25 percent higher compared to the P683.25 billion recorded in the same nine-month period last year.

The year-to-date debt figure also represents about 77 percent of the government’s P1.19 trillion borrowing program for the whole year.

For September alone, gross borrowings amounted to P1.01 billion, significantly lower than last year’s level of P43.98 billion, due to lower external debt, as well as the net redemption of domestic securities during the month.

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 Treasury data, the bulk or P626.28 billion of the total borrowings in the first three quarters came from domestic lenders, while the remaining P291.01 billion was sourced from external creditors.

Domestic borrowings, in particular, jumped by nearly 57 percent from P399 billion in the same period of 2018.

Broken down, the Treasury said P331.9 billion of the local debt was raised through the issuance of fixed-rate Treasury bonds, while another P58.55 billion came in the form of short-dated Treasury bills.

The remaining P235.83 billion was raised through the issuance of five-year retail Treasury bonds in March, which were priced at a coupon rate of 6.25 percent.

Meanwhile, the Treasury said external obligations climbed by 2.4 percent to P291.01 billion from P284.24 billion in the same period last year.

About P78.04 billion of this amount was raised through the issuance of 10-year dollar denominated global bonds, which carried an all-in yield of 3.75 percent.

Another P45.26 billion came from the issuance of samurai bonds in August, with tenors spanning three years, five years, seven years and 10 years.

The eight-year euro-denominated securities accounted for P43.49 billion of the total foreign debt, while the three-year panda bonds contributed P18.86 billion.

Multilateral agencies – including the World Bank, Asian Development Bank and the Japan International Cooperation Agency, among others — extended P77.66 billion in program loans and P27.69 billion in project loans during the period.

According to a separate report from the BTr, The national government’s outstanding debt as of end-September stood at P7.91 trillion, 0.4 percent down from the P7.94 trillion posted in the previous month.

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.