Government borrowings rise in July; debt hits record P11.61 trillion

MANILA, Philippines — The government more than doubled its borrowings in July, bringing the country’s outstanding debt to a new record high of P11.61 trillion, the Bureau of the Treasury said.

Based on records, the government hiked its gross borrowings to P337.14 billion in July, a 150.6-percent increase from P134.53 billion a year ago.

Domestic financing, accounting for more than half of total, ballooned by almost 170 percent to P180.36 billion due to the auction of more fixed-rate Treasury bonds (T-bonds).

External borrowings jumped by nearly 132 percent to P156.78 billion in July as the state issued P146.17 billion worth of dollar-denominated global bonds and acquired another P10.61 billion in project loans.

In the first seven months, the government expanded its borrowings by over 22 percent to P2.27 trillion from P1.85 trillion a year ago. Financing from onshore sources grew by a third to P1.82 trillion, while foreign borrowings declined by around eight percent to P441.73 billion.

On the domestic end, fixed-rate T-bonds comprised the bulk of the total at P779.86 billion, followed by short-term borrowings from the Bangko Sentral ng Pilipinas at P540 billion, and retail T-bonds and Premyo bonds at P463.32 billion.

The government obtained two-thirds of its financing abroad of P292.32 billion via the issuance of global, euro and samurai bonds, securing the remaining P149.4 billion through loans extended by multilateral lenders.

In total, the country’s outstanding debt has increased to a fresh record of P11.61 trillion as of end-July as the government extends its borrowing spree to fund efforts in managing the pandemic.

According to the Treasury, domestic obligations made up about 70 percent of the debt stock at P8.11 trillion, while external debt accounted for 30 percent at P3.49 trillion. With five months left in the year, the government has now added P1.81 trillion to the debt pile.

Worse, the outstanding debt is now equal to 60.4 percent of gross domestic product as of the first semester, breaching the 60 percent threshold recommended by the international community.

The government has programmed a borrowing plan of P3.07 trillion this year on a mix of 81:19 in favor of domestic sources.

It hopes to temper its borrowings to P2.47 trillion next year in an effort to slow the growth of the debt stock.