Gross borrowings hit P3 trillion in 11 months

MANILA, Philippines — The country’s debt exceeded P3 trillion from January to November as the government continued to ramp up its borrowings to fund coronavirus response efforts, according to the  Bureau of the Treasury (BTr).

From January to November, the national government’s gross borrowings surged by 210 percent to P3.05 trillion from P981.9 billion in the same period last year.

The latest figure, however, was  lower from the P3.22 trillion recorded in October  as the Treasury deducted the P300 billion short-term loan from the Bangko Sentral ng Pilipinas (BSP) it paid last September.

BTr data showed that the bulk or P2.46 trillion of the total amount came from domestic lenders, while the remaining P583.64 billion was sourced from external creditors.

Domestic borrowings swelled by nearly 262 percent from P681.87 billion last year, and was comprised of P465.31 billion in Treasury bills, P631.74 billion in Treasury bonds, P827.11 billion in Retail Treasury Bonds (RTBs), and P540 billion in short-term loans from the BSP.

Foreign debt likewise jumped by nearly 95 percent to P583.64 billion from P300.04 billion last year.

This included  the P364.64 billion in program loans and P32.93 billion in project loans from bilateral and multilateral partners; P67.33 billion in funds raised from the euro bond issuance last February; and P118.74 billion from the global bonds sale last May.

For November alone, the government borrowed P124.04 billion, 764.61 percent higher as compared to P14.35 billion in the same month in 2019.

The Philippines is ramping up its borrowings to plug the deficit in the budget, which is expected to reach 7.6 percent of   gross domestic product (GDP) this year amid weak revenue generation and higher spending requirements.

By the end of December, the Philippines’ outstanding debt is seen hitting P10.16 trillion, before further increasing to P11.98 trillion in 2021. This would translate to a debt-to-gross domestic product level of 53.9 percent for 2020 and 58.1 percent for 2021.

The government is programmed to borrow P3 trillion this year.

But while the year-to-date gross borrowings may seem to have already breached this level, National Treasurer Rosalia de Leon said earlier proceeds from the government’s switch programs should be excluded from the computation.

During its RTB issuances last February and August, the BTr offered switch tender options to investors, allowing them to exchange old securities with newer debt notes.

In total, P88.6 billion out of the P827.11 billion which was  raised this year by the Treasury  from RTB issuances came from debt swap offers.