Government cuts borrowings to P367 billion in January

MANILA, Philippines — The Marcos administration trimmed its borrowings by 16 percent to P367 billion last January even with the issuance of global bonds during the month.

Data from the Bureau of the Treasury showed borrowings at the onset of 2023 declined by 16 percent to P366.86 billion from P439.13 billion in obligations in January 2022.

The decline in financing was largely due to the 48 percent dip in borrowings from local lenders to just P179.3 billion from P345.55 billion in the comparative period in 2022.

It should be noted that it was the same time last year when the government borrowed P300 billion from the central bank through provisional advances, thus, the high base.

For January, the government just borrowed P161.68 billion through fixed-rate Treasury bonds, as well as P17.63 billion from short-term T-bills.

Meanwhile, a little over half of the borrowings during the month at P187.56 billion were from foreign sources. This is double the external debts in January 2022 that was only at P93.58 billion.

The significant increase in foreign borrowings was due to the triple-tranche global bond issuance from which the government raised some P163.61 billion, taking advantage of high demand and easing global interest rates.

At that time, the government borrowed $500 million for its 5.5-year tenor, with a coupon of 4.743 percent while it issued $1.25 billion for a 10.5-year maturity at five percent.

Its 25-year sustainability bond fetched an average of 5.5 percent and raised another $1.25 billion.

Some P18.22 billion was also sourced from multilateral institutions via program loans and another P5.74 billion was made up of project loans.

As of January, the government already used up 16.6 percent of the borrowing plan it crafted for the year, which is at P2.21 trillion.

Finance chief Benjamin Diokno earlier said the government would focus its borrowings from the domestic market as part of its prudent debt management strategy of lowering foreign exchange risks, as well as initiatives to further develop the domestic capital markets.