Gross debt swells to P2.56 trillion

MANILA, Philippines — Borrowings secured by the national government ballooned to P2.56 trillion from January to September as it ramped up its debt issuances and loan availments to fund coronavirus response measures, according to the Bureau of the Treasury (BTr).

Based on BTr data, the national government’s gross borrowings from January to September surged by nearly 180 percent from last year’s P917.282 billion.

The amount already accounted for 85.35 percent of the government’s P3 trillion borrowing program for the whole of 2020.

For September alone, the country’s gross borrowings reached P90.59 billion, a significant increase from the P1.01 billion recorded in the same period last year mainly due to the timing of redemption of Treasury bills in 2019.

The Philippines is ramping up its borrowings to plug the deficit in its budget, which is expected to widen to P1.82 trillion or 9.6 percent of gross domestic product (GDP) due to weak revenue generation and increased spending requirements amid the pandemic.

According to Treasury data, the bulk or P2.01 trillion of the total borrowings from January to September came from domestic lenders, 221 percent higher than the P626.28 billion in the same period last year.

The largest portion of domestic debt came from the two Retail Treasury Bond (RTB) issuances of the BTr this year, which raised a combined total of P827.11 billion.

The first RTB sale, which was conducted in February, brought in P310.8 billion in funds, whereas the most recent RTB offering last August generated a record high of P516.3 billion.

In addition, P492.86 billion was raised from the issuance of fixed-rate Treasury bonds during the nine-month period, while another P390.31 billion came from Treasury bills.

Domestic borrowings also include the P300 billion short-term loan acquired by the national government from the Bangko Sentral ng Pilipinas in March through a repurchase agreement.

Meanwhile, external borrowings during the nine-month period amounted to P550.27 billion, 89.09 percent higher than the P291 billion posted in the same period last year.

About P345 billion of the amount was program loan, while another P19.31 billion was project loan taken out by the government from multilateral institutions and bilateral partners.

Some P67.33 billion of the total foreign debt was also raised from the euro-denominated bond sale conducted by the Philippines back in February, while P118.74 billion came from its global bonds sale in May.

As the government continued to increase its borrowings to fund its coronavirus response efforts, the Philippines’ outstanding debt hit a record high of P9.615 trillion by the end of August.

Budget documents showed that the debt pile is expected to hit P10.16 trillion by the end of 2020, before further increasing to P11.98 trillion in 2021.