MANILA, Philippines — The government increased its borrowings for the third consecutive month, rising by 25 percent in October largely due to the administration’s first foray into offshore commercial financing.
Latest data from the Bureau of the Treasury showed total borrowings for October picked up to P182.43 billion from the P145.78 billion in obligations in the same month last year.
This is the third month in a row that the government hiked its borrowings after seven consecutive months of decline as the economy continues to reopen.
The increased borrowings in October came after the Philippines raised $2 billion in the Marcos administration’s debut in the international debt market via a triple-tranche dollar issuance.
This is also attributed to rising interest rates globally, which translated to increased yields in the domestic debt market.
Bulk of the total borrowings at almost 70 percent or P125.7 billion were from foreign sources. This is a significant jump from the P12.05 billion in the same period last year.
Global bonds made up the majority of external financing at P116.93 billion.
The government secured $500 million for its five-year tenor, with a coupon of 5.17 percent, while it borrowed $750 million for a 10.5-year maturity at 5.6 percent.
Its 25-year sustainability bond fetched an average of rate of 6.1 percent and raised another $750 million.
The remaining P8.76 billion of the external borrowings were project loans. There were no samurai bonds and program loans from multilateral institutions during the month.
On the other hand, borrowings from local lenders dipped by 58 percent to P56.73 billion as against the P133.73 billion in October 2021.
Broken down, P108.11 billion was secured through fixed-rate Treasury bonds. At the same time, the government recorded a net redemption of P51.38 billion for T- bills in October.
For the 10-month period, borrowings slipped 25 percent to P2.05 trillion from the P2.749 trillion in 2021.
This, as domestic borrowings dropped 29 percent to P1.58 trillion, while offshore financing also declined nine percent to P471.66 billion.
As of the end-October, the government has used up about 93 percent of its borrowing plan it crafted for this year.
This year, the government plans to borrow P2.21 trillion, of which P1.65 trillion would come from domestic sources while the remaining P561.5 billion would be from external sources.
This is 13 percent lower than the P2.55 trillion total borrowings for the whole of 2021.